THE INDUSTRIAL ORGANIZATION
OF AN INDIAN PROVINCE

»

THE INDUSTRIAL

ORGANIZATION OF AN

INDIAN PROVINCE

BY THEODORE MORISON

(LATE PRINCIPAL OF THE MOHAMMEDAN ANGLO-ORIENTAL COLLEGE,
ALIGARH)

LONDON

JOHN MURRAY, ALBEMARLE STREET, W.

1906

PREFACE

This book is intended primarily for Indian students.
My experience has convinced me that in India the
study of economics has a tendency to become un-
desirably abstract, because the industrial facts which
are mentioned in English books to illustrate economic
theories are mostly taken from European industry,
and are, therefore, as remote from the experience of
Indian students as the theories they are designed to
illustrate. My object in this book has been to review
the principal economic facts in the society with which
Indian students are familiar, and to show the relation
of those facts to the abstract economics which they
read in their text-books. I have not hesitated to make
copious extracts from official publications, because
these are not generally accessible to students. Wher-
ever possible, I have quoted the passages which I
adduce as evidence textually, because I believe that
the actual words of an original authority are more
stimulating than any summary. The advantage which
a student derives from extracting for himself the
economic moral of a record is lost when the original
is digested for him by an officious instructor.

I do not pretend to have anything fresh to say to
experts upon such technical subjects as settlement,
irrigation, famine relief, etc. My wish has been to
insist upon these matters only so far as is necessary
to show their economic bearing; that which is new
in this book is the attempt to consider the economic

V

vi PREFACE

phenomena of an Indian province as one whole.
Many interesting studies of particular industrial
problems may be found scattered about the official
literature of the Government of India, but these are
usually incidental to the consideration of a technical
question, and cannot, in the form in which they were
published, be placed in the hands of students. As far
as I know, no attempt has yet been made to examine
Indian industry from the point of view of the
economist.

I have thought that this book might prove interest-
ing to some European readers who desire to study
the industrial organization of India for the purpose of
comparative economics. In view of the possibility of
having a few such readers, I have added some explana-
tions which are superfluous to Indian students.
European readers, on the other hand, will find some
facts regarding European industry set forth with a
detail which is unnecessary for them. Thus the book
has, I fear, suffered from the attempt to address two
different classes of readers at the same time.

It was my wish to have dated this book from the
Aligarh College, in the prosperity of which I have
been so deeply interested for the last seventeen years ;
but the duties of a member of the staff in a residential
college left me little time for private work, and there-
fore, although I continued to collect material as long
as I was in India, I was not able to put it together
until I reached England.

THEODORE MORISON.

ashleigh,
Weybridge.

CONTENTS

CHAPTER PAGE

INTRODUCTION - - I

I. THE INDUSTRIAL UNIT I THE VILLAGE - - IO
II. PUBLIC AND PRIVATE OWNERSHIP OF LAND : THE

LANDLORD AND THE GOVERNMENT - 1 7

III. THE COMPETITION FOR LAND : THE LANDLORD AND

THE TENANT - - - - - 40

IV. FIXITY OF TENURE: THE LANDLORD AND THE TENANT

— {continued) - - - -62

V. AGRICULTURAL INDEBTEDNESS : THE PEASANT AND

THE MONEY-LENDER - - - 82
VI. REMEDIES FOR AGRICULTURAL INDEBTEDNESS : THE

PEASANT AND THE MONEY-LENDER {continued) - 112

APPENDIX TO CHAPTER VI. - - - 1 28
VII. AGRICULTURAL CAPITAL - - - 149
VIII. THE DIVISION OF LABOUR, OR THE VILLAGE ARTISAN 1 74
APPENDIX TO CHAPTER VIII. - - 199
IX. THE DIRECTION OF INDUSTRY : THE CULTIVATOR - 208
APPENDIX TO CHAPTER IX. - - - - 235
X. THE INTERRUPTION OF INDUSTRY I FAMINES - - 239
XL THE RELIEF OF THE UNEMPLOYED : FAMINES [con-
tinued) ...... 2(jy

XII. PRICES - - - - - - 291

APPENDIX TO CHAPTER XII. - - - "313

INDEX

321

INDUSTRIAL ORGANIZATION
OF AN INDIAN PROVINCE

INTRODUCTION

That part of economic science for which we may
claim universal application is confined to a few funda-
mental conceptions, and a few general principles
which appear to hold good in all forms of society.
But the great bulk of economic doctrines are not
universal laws ; they are only statements of the
manner in which general principles operate in special
conditions. As the study of economics has hitherto
been confined to the inhabitants of Western Europe
and North America, it is the operation of general
principles in the special conditions of those coun-
tries which has principally engaged the attention of
economists. It therefore happens that the economic
theories which are best known and which have most
influenced public opinion represent conclusions which
have been reached regarding that particular type of
industrial organization which exists in the United
States and Western Europe. Modern economists do
not claim that these theories are of universal applica-
tion ; on the contrary, they recognise that different
ages and different phases of human evolution present
different types of industrial organization, and that
economic theories which are correct statements of

2 INTRODUCTION

the manner in which general principles operate in one
economic type are not necessarily true of their opera-
tion in another.

When, therefore, we approach the study of the
economic phenomena of India, we must bear in mind
that we are about to deal with a type of industrial
organization which is not the type tacitly assumed in
most books upon abstract economics. From this it
follows that we shall not be at liberty to assume the
truth of any economic theory until we have assured
ourselves that the premises on which it rests are
satisfied by the Indian conditions. Our ultimate goal
ought to be the construction of an independent body
of economic doctrines which could be logically de-
duced from the observed facts of Indian society. I
do not think that the time has yet come when it is
possible to attempt a complete statement of the
economics of Indian industry ; the material at our
disposal is at present too scanty. Before constructive
speculation can be profitably undertaken the economic
facts of Indian life need to be collected, sifted, and, if
I may use such an expression, cross-examined to find
out exactly what interpretation they will bear. This
book is intended to be a contribution towards such a
collection of evidence. I shall attempt to sketch in
very meagre outline the industrial organization of a
particular province, and in so doing expose what I
believe to be the principal economic facts in a society
of this type. If this investigation could be made
complete, it should reveal the premises from which
the economics of Indian industry could be framed ; it
should make clear which of our current economic
doctrines are applicable to Indian society and which
are not. Strict logic would demand that this investi-
gation should be a plain record of fact, and should be
absolutely free from constructive speculation. But
unfortunately it is not easy to collect economic facts
without some bias of theory; the possibly relevant

INDIAN AND EUROPEAN INDUSTRY 3

facts are so numerous that it is only from a selection
of them that any definite meaning can be extracted,
and the very act of selection implies a theory. In the
succeeding chapters, therefore, I propose to recognise
the necessity of employing some theory about which
the evidence can be grouped, and for the most part I
shall make use of the familiar theories which have
been framed for European conditions of industry ; but
it must be borne in mind that these theories are for
India only tentative and provisional, and that they are
to be accepted only if they are found upon examina-
tion to be adequate explanations of the Indian facts.

When the evidence has been collected and examined,
it will be possible to point out the exact difference
between the Indian and European type of industrial
organization. I do not think that this can be done
with profit now, but even in the present state of our
knowledge it is possible to point to certain broad re-
semblances and contrasts between the two types. I
do not think it can be maintained that there are
economic forces at work in the one which are in-
operative in the other. Thus, to take a specific
example, I do not think that competition is a force of
less importance in Indian than in European industry.
I cannot find any support for the opinion that competi-
tion is in India neutralized by custom. Undoubtedly
there is in India a great deal of what is known as
' economic friction,' impeding the operation of general
laws ; but in no country is economic friction abso-
lutely negligible, and when we compare the agricultural
classes of Europe with those of India, the difference
between them in this respect is not very remarkable.
At most, there is a difference in degree, and not in
kind.

But if the economic forces are much the same in
India and Europe, there is the greatest difference
between the distribution of economic functions among
the various classes in one society and the other. To

1 — 2

4 INTRODUCTION

my mind the most important difference between the
two types of industrial organization is this : in India
the labourer usually works on his own account ; in
Europe he is usually a hired man, working for an
employer. There are, of course, in each society some
workmen of the type which is characteristic of the
other. Thus, although in England the labourer usually
works for an employer, and receives wages irrespec-
tive of the price at which his employer sells the
product of his industry, yet there are a few examples
of the labourer working on his own account, such,
for instance, as ihe tinker and the cobbler, who are
survivors from an earlier industrial organization.
And in India there are some labourers who occupy
the same position as wage-earners in Europe. In all
Indian towns there is a considerable number of men
engaged in manual labour who receive daily or monthly
wages, but as the urban population is only a small
fraction of the total population, they are relatively
of small importance. In the villages also there are
almost always a few persons serving for wages. But
the great bulk of the labouring class of India are
men who work on their own account, and not for an
employer. In addition to supplying the labour neces-
sary for the production of wealth, they direct industry
and undertake the risks of production — that is to say,
they discharge the functions of the entrepreneur or
business manager in Europe.

Many important consequences follow from this dis-
tribution of economic functions, and they are those
which most clearly differentiate the Indian from the
European organization of industry. To the student
this particular distribution of functions is important,
because it invalidates the application to India of most
of the current economic doctrines about the working
classes. Thus the rate of wages, which appears to
an American writer ' the paramount question to the
vast majority of the people of civilized lands,' is a

THE INDIAN LABOURER AND WAGES 5

matter of very slight concern to the working class of
India.*

Dear bread, too, the apprehension of which causes
so much anxiety to a working man in Europe, is to
the small farmers who form the majority of the Indian
population welcome evidence that their produce will
fetch a good price. And to take a historical case :
the inflation of the currency, which inflicted a great
injury on the English working classes in the reign of
Henry VIII., was in the last century a positive boon
to the Indian working man, for it gave him a small but
much-needed advantage over his creditor the village
money-lender.

But it is not in its relation to economic theories,
but in its bearing upon the production of wealth, that
the distribution of functions most deserves attention.
The part of the entrepreneur may be played by either
the landlord, the capitalist, or the labourer, or, as is
often the case in Europe, by a fourth person who is
only an entrepreneur — one, that is, who leases his
land, borrows his capital, and pays wages for labour,
and whose only function is to initiate industrial opera-
tions. But the efficiency of industry will differ very
much according to the class of man upon whom the
responsibility of directing it happens to be thrown.
The production of wealth is most likely to be large
in countries in which, as in Europe, the direction of
industry is in the hands of a man who by education
and natural ability is specially fitted for the task. In
Europe and America the ideal entrepreneur is a man
fully conversant with all the processes of production,
and always on the alert to discover more efficient or
more economical industrial methods ; he grades his
workmen to their work according to their individual
capacities, and he studies the demand of his market in

* ' The paramount question— the one which is of prime importance
to the vast majority of the people of civilized lands — is, What makes
the rate of wages ?' — ' The Distribution of Products,' by Ed. Atkinson.

6 INTRODUCTION

order to dispose of the product to the best advantage.
When industry is so directed, it is likely to terminate
in the production of a greater volume of wealth than
when it is controlled by an uneducated labourer who
has to combine these delicate tasks with exhausting
manual toil. In India the direction of industry is in
the hands of men who have no chance of learning
about new methods of production, new mechanical
appliances, or of studying the condition of the market.
The peasant who cultivates a small holding, for
instance, is not in a position to learn of the existence
of unfamiliar varieties of grain or cotton ; he has no
opportunity of finding out what devices for lifting
water or crushing sugar-cane have been invented,
or what degree of success they have achieved. His
acquaintance with the market is confined to knowing
of a demand which has clearly manifested itself; he
has no means of ascertaining what the future
movements of the market are likely to be. The
hand-weaver is in the same position : he has no
opportunities of learning of the mechanical improve-
ments by which the efficiency of his loom could be
enormously increased, and he continues to ply his
craft in the fatiguing and ineffective fashion which his
predecessors followed a thousand years ago. In these
circumstances the total output of wealth cannot be as
great as in a society in which industry is directed by
men possessing technical skill, commercial knowledge,
and administrative ability. Between one society and
the other there is the same difference as there is
between a mob and a highly-disciplined army led by
competent officers.

The wealth produced in a country is the national
dividend from which all the factors of production re-
ceive their reward. Where the national dividend is
small, the share which falls to the labourer's lot is
small also, and it is a natural result of his methods of
production that the Indian labourer gets a scanty

THE INDIAN LABOURER'S INDEPENDENCE 7

reward for his toil. Theory and evidence alike con-
firm the paradox that where the labourer works on
his own account, as in India, the reward of his toil is
much smaller than where, as in England, he works for
an employer.*

In some respects, however, the Indian industrial
organization is more favourable to the labourer than
the European. In Europe the labourer cannot begin
to work without the permission of the employer ;
the land, the implements of production, and the raw
material are all under lock and key, and the labourer
can only get access to them if he complies with the
terms which an employer offers him. The European
workman who is thrown out of work not only sees
his children ill fed and ill clothed through no fault of
his own, but has to bear the added bitterness of the
injustice of his misfortunes. Among the lower orders
of labour there is the further danger that the workman
will be degraded by the irregularity of employment.
The man who has to get his living out of a little plot
of land is at least free to work when and for as long
as he likes, and has the strongest inducements to
industry. To the Indian cultivator, ground down

* Those who amuse themselves by the manipulation of conjectural
statistics may be interested in the result obtained by comparing
Mr. F. J. Atkinson's estimate of the annual income of British India
with Mr. Chiozza Money's estimate of the annual income of the
United Kingdom. Such a comparison yields this result : Wages of
35s. a week in England represent the same proportion of the national
dividend as Rs. 7 a month in India. I am inclined to think from
personal observation that this is not very far from the truth : the man
who earns Rs. 7 a month in India probably does occupy about the
same position in the social scale as the artisan who earns 35s. a week
in England. The figures for wages in ' Prices and Wages ' are so
untrustworthy that no statistical comparison can be made. The
figures upon which the above calculation is based are :

Population
in Millions.

Income
in Millions.

United Kingdom

... 42 ..

£
. 1,710

British India

... 231

• 584

8 INTRODUCTION

between a rack-renting landlord and a usurious money-
lender, it may be but small consolation to learn that
the armchair philosopher thinks he is in a position
which favours the growth of the economic virtues,
but it remains true that he enjoys some advantages
for which the English workman sighs in vain.

There is one other general observation to be made
regarding the Indian organization of labour — namely,
that it is one in which it is not possible that the
division of labour should be carried very far. Owing
to the necessities of agriculture, the people are scat-
tered over the face of the country in small villages,
and, owing probably to the defectiveness of communi-
cation in the past, these villages constitute self-
sufficing industrial units ; as the division of labour is
limited by the possibilities of exchange, there is no
opening in such villages for specialized skill. In
agriculture, which is the main occupation of the rural
population, this is not a great evil, because it has
not in any country been found possible to carry the
division of labour very far in agriculture ; but the
subsidiary industries would be made much more
efficient if labour could be further divided. As
however, the object of this book is to record the
phenomena of Indian industry, and not to speculate
upon the data we already possess, I will proceed at
once to an examination of the facts. My survey will
be confined to that portion of India which has been
known at different times as the Ceded and Conquered
Territories, the North-Western Provinces and Oudh,
and the United Provinces of Agra and Oudh. My
reason for confining attention to one particular pro-
vince is to bring out distinctly the essential features
of a particular type of industrial organization. Were
I to attempt to embrace all India in a single survey, I
should be compelled to subject every general state-
ment to some qualification, and thus the distinctive
features of the Indian organization of industry would

A TYPE OF INDUSTRIAL ORGANIZATION 9

be blurred and confused ; but in a particular province
the economic conditions are sufficiently uniform to
permit of general statements which present clear-cut
and intelligible outlines. If the industrial organiza-
tion which prevails in the United Provinces is found
upon examination to be typical of the whole of India,
then the examination of the type in one province is
sufficient for the understanding of the whole country ;
if, on the other hand, it is found that in Madras and
Bombay other economic conditions prevail, then there
would be loss instead of gain in attempting to make
general statements about two dissimilar economic
types.

CHAPTER I

THE INDUSTRIAL UNIT: THE VILLAGE

In 1901 the population of the United Provinces was
47,691,782. This population was distributed among
the following occupations, each occupation being
understood to support not only the workers but also
their dependents — i.e., women and children, etc.

1. Administration ...

2. Defence

3. Service of native and foreign States

4. Provision and care of animals

5. Agriculture

6. Personal, household, and sanitary services

7. Food, drink, and stimulants

8. Light, fire, and forage ...

9. Buildings

10. Vehicles and vessels

11. Supplementary requirements

12. Textile fabrics and dress

13. Metals and precious stones

14. Glass, earthen, and stone ware

15. Wood, cane, leaves, etc....

16. Drugs, gums, dyes, etc. ...

17. Leather, etc.

18. Commerce

19. Transport and storage ...

20. Learned and artistic professions

21. Sport ...

22. Earthwork and general labour

23. Indefinite and disreputable occupations

24. Independent

573,027

53.394

7,160

522,683

31,180,660

2,676,334

2,650,282

96,284

123,499
6,170

233,239

1,890,129

660,856

433,235
560,523
130,671

349 395
366,415
545,8o7
622,184
20,164

3,i34,23i
132,055

721,385

It is not possible to institute an exact comparison
between the distribution of the population in India and

10

THE OCCUPATIONS OF THE PEOPLE n

England according to occupation, because the Census
of the United Kingdom is prepared upon another
principle. But the next table, which has been compiled
from the Census of 1901 for England and Wales, is
sufficient to give an idea of the profound difference
between the industrial conditions of the two countries.

Males.

Females.

Total of Males
and Females.

Engaged in national or local
government ...

Defence of the country

Professions and their sub-
ordinate occupations

Domestic services

Commercial

Conveyance of men, goods, and
messages

Agriculture

Fishing

Mines and quarries

Metals, machines, implements,
and conveyances

Precious metals, jewels, watches,
etc.

Building and works of con-
struction

Wood, furnishing, fittings, and
decorations ...

Brick, cement, pottery, and glass

Chemicals, oil, soap, etc.

Skins, leather, hair, and feathers

Paper, prints, books, and
stationery

Textile fabrics ...

Dress

Food, tobacco, drink, and
lodging

Gas, water, and electricity supply
and sanitary service

Other, general, and undefined
workers and dealers

Total engaged in occupations...

Without specified occupation or

unoccupied

Population over ten years

171,687
168,238

3II,6l8

304.195
530,685

1,249,000
1,071,040

23,725
800,179

I,I74,l8o

130,731
1,042,864

233,000

142,365

101,938

80,071

188,057
492,175
4H,637

774,291

71,284

68l,Ol6

26,500

294,642
1,690,722

59.944

18,825

57,564
166

5.006

63,016

18,707

702

24,592
33,^48
26,702
25,270

90,900
663,222
710,961

299,518

141

6l,503

198,187
168,238

606,260

1,994,917

590,629

1,267,825

1,128,604

2^,891

805,185

1,237,196

149,438
1,043,566

257,592

175,513
128,640

105,341

278,957
1,155,397
1,125,598

1,073,809

7L425

742,5 19

10,156,976
I>977,283

4,i7I,75i
9,017,834

14,328,727
IO,995,II7

12,134,259

13,189,585

25,323,844

12 THE INDUSTRIAL UNIT: THE VILLAGE

On comparing these two tables one fact immediately
arrests attention, and that is the difference in the im-
portance of agriculture in England and India. Of all
the males occupied in England only 10*5 per cent, are
engaged in agriculture, and there are no less than four
other industrial groups in which the number of workers
is greater than in agriculture. In India, on the other
hand, agriculture is of such overwhelming importance
that all other industries are reduced to insignificance
in comparison. Out of a total population of 47,691,782
over 66 per cent., or 31,703,343, were returned in the
Census as workers at, or dependents on, pasture and
agriculture of all kinds. In addition to these, out of
7*852,553 other workers who declared their principal oc-
cupations to be unconnected with land directly, 666,692
recorded agriculture as a subsidiary occupation. The
industry next in importance to agriculture, Order 22,
'Earthwork and general labour,' supports 3,134,231,
and in the words of the Census Report (Part I., p. 262),
1 It is almost certain that a very large number of them
work principally on land.'

As two-thirds of the population of these provinces
are supported by agriculture — and there is no single
occupation which supports one-tenth of this number
of people — all other callings may be classed as sub-
sidiary industries, which subsist principally by assist-
ing agriculture indirectly, or by supplying the wants
of the agricultural population. The survey of the
industrial organization of these provinces is therefore
reduced to a description of the economic conditions
governing agriculture.

The agricultural population is distributed as follows:

1. Zamindars ... ... ... ... 3,441,879

2. Tenants with some rights of occupancy ... 10,613,639

3. Tenants with no rights of occupancy ... 10,245,927

4. Sub-tenants ... ... ... ... 2,137,994

5. Agricultural labourers ... ... ... 4,362,774

6. Growers of special products ... ... 124,474

7. Agents, rent-collectors, forest rangers, etc. ... 253,973

THE AGRICULTURAL POPULATION 13

Among the agricultural population ought also to be
classed the majority of the 522,683 persons occupied in
the care of animals.

The term zamindar covers all persons who have
proprietary rights in the soil, and includes both land-
lords in the English sense and peasant proprietors.
The Census of 1901 makes no distinction between
these two, but in the Census of 1891 the zamindars
were classified as follows :

Landed proprietors, not cultivating ... ... 545,728

Landed proprietors, cultivating ... ... 3,251,084

Total zamindars ... ... 3,796,812

As there is no reason to suppose that the proportion
between these two classes has been materially dis-
turbed, we may assume that the number of peasant
proprietors is about 3,000,000; if to these we add the
tenants and sub-tenants, we get a total of approxi-
mately 26,000,000 persons supported by the cultiva-
tion of small holdings. Thus, more than half the
population of the provinces are petty farmers (in-
cluding in this term the farmer's family) who raise
food primarily for their own consumption, and who
obtain the money which they need for rent, interest
on debt, or the purchase of minor luxuries by the sale
of their surplus produce.

This agricultural population is scattered over the
level plains of the United Provinces in small villages,
each village constituting an industrial unit which con-
tains in itself all the labour, capital, and skill which
are in India considered necessary for the cultivation
of the soil. In almost every village there will be
found representatives of three distinct industrial
classes. The first of these are the landlords. The
land upon which the industry of the village is ex-
pended belongs either to an individual landlord or
landlords, or to a group of relations who constitute a
body of joint proprietors ; these landlords usually

i4 THE INDUSTRIAL UNIT: THE VILLAGE

belong to a socially higher rank than the majority of
the rural population, and are thus in a position to
command the respect of their fellow-villagers inde-
pendently of the power which is conferred upon them
by the monopoly of the land. Next to them are the
petty farmers or cultivators, who constitute the largest
of the three classes ; these men rent from the landlord
small parcels of land which they usually hold on a
yearly tenure, and, were it not for the associations
now inseparable from the term, they might be de-
scribed simply as cottiers. The last class is made up
of such artisans as the carpenter, the blacksmith, and
the potter, who assist agriculture by making or re-
pairing agricultural tools, or supplying the domestic
wants of the agricultural population. To this class
also belong the village servants, who perform the
menial offices of the village, and who are the common
drudges of the little community. Although the per-
sons in this last category follow a variety of occupa-
tions, the whole class is relatively small, because there
are few villages so large as to demand the services of
more than one carpenter or potter.

These different classes are bound together by the
solidarity of their interests. All the persons who are
maintained, in whatever capacity, by one industry,
have a common interest in its prosperity. When the
raw material is imported from a great distance, or the
methods of manufacture are complex, or the sale of
the finished product is effected far from the factory,
this solidarity of interest is apt to be obscured. But
in a small community depending entirely upon agri-
culture, the sense of solidarity is strong ; it is patent
that all classes in an Indian village must suffer from a
drought which suspends husbandry altogether, or from
a frost, which kills the ripening grain in the ear.
When the cultivator cannot sow his seed, the landlord
has no difficulty in realizing that he can get no rent
nor the artisans in anticipating similar misfortunes for

COMPETITION IN AN INDIAN VILLAGE 15

themselves. To this consciousness of interdepend-
ence must be added a sense of unity which springs
from the comparative isolation of the village. Taken
together, the two form powerful bonds which knit the
inhabitants of the village into a very compact industrial
unit. But solidarity of interest is not incompatible with
competition, nor does familiarity necessarily beget
friendliness ;* and in a Indian village there are the
same motives which prompt men to pursue their
economic interest as in all industrial communities. f

The landlord desires, as a rule, to let his land to the
best advantage ; the tenant is anxious to pay as low a
rent as possible, and to sell his produce for the highest
price it will fetch. When he finds that he can make a
larger profit by raising wheat than by growing sugar-
cane or cotton, he does not hesitate to pursue the
course which he thinks most advantageous. The
artisans realize when there is a demand for their
services and transfer themselves to places (outside the
village) where they are most highly rewarded. Even
the lowly menials whose part in the social system has
for generations been degrading drudgery, struggle to
improve their lot, and when an opportunity presents
itself engage in the cultivation of land like their betters.
The readiness with which they have in modern times
turned their freedom from caste restrictions to account
is in itself a proof that they have a quick eye to their
economic advantage. Inside the narrow circle of the
Indian village competition is the rule, as it is in the
wide sphere of international commerce. But it is com-
petition among persons who are for the most part

* As a matter of fact, the country-folk, both in India and in
England, seem more pertinacious in their quarrels than the in-
habitants of the towns.

f Since the publication of Mr. B. H. Baden-Powell's book on
' The Origin and Growth of Village Communities in India,' it is
hardly necessary to show that there is no community of property
in an Indian village in the sense understood by Sir H. Maine.

16 THE INDUSTRIAL UNIT: THE VILLAGE

illiterate, who know nothing of the world beyond the
village, and who are for practical purposes imprisoned
in the narrow circle of familiar fields. Such men have
not the facilities to improve their position which are
accessible to every boy in London and in New York.
In respect of the most important factors governing
their material life they are helpless, and competition
is more often a name for the action of inimical forces
against which they are powerless to contend than of
their own endeavours to ameliorate their lot.

Competition working in these conditions will in-
evitably bring about results dissimilar to those which
follow from its operation in the conditions of English
or American industry ; but this dissimilarity is no
ground for arguing that competition does not exist.
In dealing with rent, prices, and the indebtedness of
the peasantry, I shall have the opportunity of ex-
amining in detail the effects of competition in the
rural community. What I wish to emphasize here is
that economic forces operate in a circumscribed area,
that the industrial unit upon which attention must be
concentrated is the village, and that each village is
self-sufficient and economically independent to a
degree which surprises those who are familiar with
the plexus of interests by which the different pro-
vinces of European countries are united together.

CHAPTER II

PUBLIC AND PRIVATE OWNERSHIP OF LAND: THE
LANDLORD AND THE GOVERNMENT

To the economist the ultimate justification of private
property rests upon the conviction that the surest
way to bring about the abundant production of wealth
is to secure to the producer the free disposal of what
his exertions have produced. This general argument
in favour of private property does not, however, afford
any vindication of private property in land. Land is
the free gift of Nature, and its extent and productive
capacities are not (except in rare cases) due to the
exertions of the landlord, and therefore no privileges
or disabilities imposed upon the landlord could affect
the productiveness of the land. Indeed, there is no
reason to suppose that the production of wealth would
be impeded in a society which did not recognise private
property in land at all, as long as the use of the land
was guaranteed to the cultivator for a season.

But though the landlord cannot nowadays rest his
claims to the exclusive ownership of land upon the
same fundamental principle which justifies other forms
of private property, it is probable that in earlier ages
he rendered services to industry which fairly entitled
him to a share in the product. Those services con-
sisted in the protection of industry. In the lawless
condition of early society the chief who could assure
the agriculturist of security and enable him to reap
the crop which he had sown, performed a most

17 2

18 THE OWNERSHIP OF LAND

valuable service to industry, for which, according to
the strictest economic, reasoning, he was justified in
claiming a share in the product. But with the growth
of settled government, the necessity for the services
of the local landlord has declined ; his primitive
functions are now discharged by the State, and there-
fore his claim to the exclusive ownership of a certain
portion of the earth's surface has not the economic
justification which attaches to other forms of private
property.

With this economic theory may be contrasted the
English and American practice of regarding land as
the absolute property of the landlord. According to
the English doctrine the land is the landlord's to do
as he pleases with, and he has as good a right to
drive the best bargain he can in letting it, as he has
to sell his cattle or his grain to the highest bidder;
he is responsible to no one for the use to which he
puts the land.

The Indian conception of landed property may be
regarded as a compromise between these two extreme
views. In India the landlord's title to the land is
acknowledged, but it is a title subject to very con-
siderable limitations. On the one hand, his owner-
ship is limited by the claim of the State to a joint
interest in the land, and, on the other, by the claims
of the tenant to a semi-proprietary right (to fixity of
tenure) in his holding.

Theories respecting land tenure have always been
to the Indian Government questions of great practical
importance, because from time immemorial the revenue
derived from land has been the mainstay of State
finance. The land revenue is that proportion of the
private landlord's income* which is claimed by the

* The landlord's income is known in official literature as his
' assets,' a term which covers rent and other advantages accruing
from the ownership of land.

' These " assets ' ' mainly consist of the total rents actually received,

NATIONALIZATION OF LAND 19

State, and in determining the principles upon which
this land revenue should be assessed the Government
has been compelled to consider the theories governing
the ownership of land. Upon no other question of
public policy in India is the literature so voluminous
or controversial as that relating to the assessment of
land revenue. Official opinion has been swayed first
by one theory and afterwards by another the most
opposite, and even if we may assume that a settled
policy has at last been reached, the controversy is
still so fresh that abstract speculations regarding the
ownership of land have a very practical interest for
Indian students. For convenience of reference, the
three opinions which have principally influenced the
discussion upon the ownership of Indian land will
be referred to as (1) the Economic doctrine, (2) the
English doctrine, and (3) the Indian doctrine. These
names have not much claim to accuracy, but they are
distinctive and convenient.

The rigid application of the Economic doctrine would
seem to require that private property in land should
be abolished, and that all land should become the
property of the State ; in other words, that the land
should be nationalized. In old countries, however,
this is hardly ever a practical policy, because the
State has usually recognised the rights of certain
persons to a beneficial interest in the land, and these
rights cannot be withdrawn without injustice. But
although the State is pledged to maintain the existing
privileges of the landlord, it might legitimately appro-
priate to itself all future increments in the value of

together with the calculated rental value of lands held by the
proprietors themselves, or allowed by them to be rent free ; to
these may be added any other sources of profit, such as valuable
waste lands, income from grazing, fruits, and wild produce, etc.
The rental assets are, of course, the principal thing.' — 'A Short
Account of the Land Revenue and its Administration in British
India; with a Sketch of the Land Tenures,' by B. H. Baden-Powell.

2 — 2

20 THE OWNERSHIP OF LAND

land, and thus place existing landlords in the position
of annuitants drawing a fixed income from the land,
but having no power to control the use of it.

This was the view taken of land in India by those
who maintained that the land revenue was not a tax,
but was rent. It was asserted that the State in India
had never divested itself of its supreme proprietary
right in the land ; the most that could be asserted was
that Indian rulers in the past had recognised the tenant's
claim to fixity of tenure; but while recognising his
right not to be dispossessed from his holding as long
as he paid his rent to the paramount landlord, they
had actually exercised their privilege of appropriating
to the State the whole of the increased value of land.
This view was fortified by the reflection that it is the
State which now renders to agriculture, and to all
industry, the services which the zamindar used in
lawless days to perform ; it is the State which now
confers upon the agriculturist security in which to
pursue his industry, and it is the State which executes
most of the permanent improvements upon the land —
such as irrigation-canals, drainage-cuts, roads, and
railways. According to this view of the relation of
the State to land, the Indian zamindar was but an
agent for the collection of the State revenue, and he
was entitled to nothing more than a percentage of his
collections as a recompense for his trouble. This
view gained support from the fact that a considerable
number of persons who are now recognised by the
British Government as the owners of estates, were
originally nothing more than farmers of the revenue —
i.e., persons who accepted the contract of collecting
the Government Revenue on condition of keeping to
themselves a certain percentage of their collections.
The practical application of this view would, of course,
have been to raise the land-tax so as to take from the
zamindar all profits in excess of those surrendered to
him at the last settlement. The theory of State land-

THE LAND REVENUE NOT RENT 21

lordism was opposed by all who wished to see a limit
placed upon future assessments, and who looked upon
the land revenue simply as a tax upon agriculture, to
be kept within the same limits as taxes upon other
industries. In the course of this controversy, which
was long maintained and very ably debated, the Under
Secretary of State for India, Sir L. Mallet, put forth
a novel vindication of private property in land. 'The
function of rent,' he argued, ' is to restrain the undue
pressure of population on the soil. The presence of
rent is the result of the demand for land pressing on
the supply. The private landlord performs for society
functions analogous to those of the " forestaller " or
" regrater," in adapting demand to supply, population
to means of subsistence. His demand for rent is a
warning to pass on to unoccupied lands and pastures
new, or to cease to increase and multiply without
replenishing the earth, and it is a warning which
cannot be disregarded with impunity or by the
juggler's trick of taking the rent from the agricultural
class in the name of the State and handing it back to
the whole population as proprietors of the soil.'*

Interesting as is the question of the nationalization
of the land, it is useless to discuss it any further here,
because the Government of India has definitely re-
pudiated such a conception of its rights in the land.
' The British Government has everywhere conferred
or recognised a private right in land, and in large
areas of country — Bengal, Oudh, and the whole of
Northern India, for example — it has expressly declared
the proprietary rights of the landlord and the village
owners. It is, then, impossible any longer to say
broadly that the State takes a rent from the land-
holders regarded as tenants. There are no doubt
cases where Government is the immediate owner of
particular lands, as it is of all waste and unoccupied

* • Sir Louis Mallet : a Record of Public Service and Political
Ideals,' by B. Mallet, p. 117. London : John Nisbet and Co.

22 THE OWNERSHIP OF LAND

land in general ; but we are speaking of cultivated
land in villages and estates. The Government is cer-
tainly not owner of this ; the utmost it does is to
regard the land as hypothecated to itself as security
(in the last resort) for the Land Revenue assessed
upon it.'*

The Economic doctrine has therefore never been
applied to the ownership of land in India; and since
the State has formally recognised private property in
land the landlords have as good a title to their estates
as any owners of property. I hold most strongly that
when once the State has recognised the legality of
private property in any commodity, be it in land or
slaves, or any other form of wealth, the owner cannot
be dispossessed of it without fair compensation.
Whatever arguments may be found in abstract reason
against private property in land, they do not release
the State from the pledge which it has given by re-
cognising the legality of this form of property.

But if the Economic doctrine may be considered to
have now only an academic interest the same cannot
be said of the English doctrine. English conceptions
of landed property have in the past greatly influenced
the Land Revenue policy of the Government. The
English officials who took over this province at the
beginning of the nineteenth century were anxious to
create in India a body analogous to the landlord class
in England. This end they believed would be realized
by fixing the land-tax in perpetuity. By this means
the landlord would know exactly what sum he had to
pay to the Government every year, and he would have
the strongest inducement to improve his estate in the
knowledge that anything which he could make from it
over and above the land-tax would be his private pro-
perty and not subject to any imposition from the
State. Soon after the acquisition of this province at

* 'A Short Account of the Land Revenue and its Administration
in British India,' 13. H. Baden-Powell, p. 49.

A PERMANENT SETTLEMENT 23

the beginning of the nineteenth century, the Govern-
ment therefore formally declared its intention of
making a permanent settlement with the landholders
— that is to say, of fixing in perpetuity the tax upon
rent. This intention was stated unequivocally in a
circular, issued by the Commissioners who then dis-
charged the functions of the Board of Revenue (Messrs.
R. W. Cox and H. G. Tucker), to all collectors, dated
September 7, 1807.

' It is almost unnecessary to observe that principles
which scarcely admit of a question, and which recent
experience in the Lower Provinces* may now be con-
sidered to have established in the most satisfactory
manner, point to the expediency of limiting the demand
of Government upon land ; and the Governor-General
in Council, in enacting Regulation 10 of 1807, has
evidently had in view to extend to the Ceded and
Conquered Territory* the benefits which have already
been realized in Bengal from the practical operation
of those principles. The permanent settlement con-
cluded in the Bengal Provinces has notoriously been
attended with the happiest success, and the flourishing-
state of those provinces must, we think, be ascribed
in an eminent degree to that wise and salutary measure.
. . . We consider it to be a point established that it is
desirable to extend to the Ceded and Conquered Terri-
tory the benefit of a permanent settlement whenever
circumstances may admit of it, and the chief object of
our present reference to you is to ascertain how far
the present state of your district encourages an opinion
that the ensuing settlement can be declared permanent,
consistently with a proper regard to the rights of the
landholders and tenantry, and to the interests and just
expectations of Government. 't

* Lower Provinces = Bengal ; Ceded and Conquered Territory =
Province of Agra.

f Selections from the ' Revenue Records of the North-Western
Provinces, Allahabad,' 1873.

24 THE OWNERSHIP OF LAND

Even as late as 1820 this was still supposed to be
the official view. In a minute dated May 24, 1820,
Mr. J. Adam wrote : ' It is agreed on all hands, in this
country at least, and will not, I apprehend, be denied
by the Honourable Court, that the Government is
pledged, sooner or later, to impose a limitation on the
public demand from the land in the Ceded and Con-
quered Provinces.'*

For the Indian tenants it was a fortunate accident
that the local officers, to whom the Commissioners
addressed themselves in 1807, did not believe that the
time had then come for making the settlement perma-
nent. Their grounds for this opinion were that the
country was at that time still very impoverished and
depopulated. There is abundant evidence that this
was the case. Almost all the early collectors deplore
the depopulation of their districts, and refer to ' ex-
tensive tracts of waste land.' Nothing has brought so
vividly before my own imagination the thinness of the
population in those days as an account given by an
English traveller in 1794 of his journey through a
country which I know well. This is how he describes
his ride from Koi'l (i.e., Aligarh) to Jalali, a townlet
some fifteen miles from Aligarh :

'The country resumed its desolate appearance. It
was a flat waste abandoned entirely to Nature, no sign
of human industry being visible. All that broke the
uniform surface was a waving line traced faintly in
the sand by preceding travellers, who seemed to have
followed the footsteps of each other as I did theirs.
... At five in the afternoon a village built upon a
sandy protuberance, which rose above the general
level, appeared before us towards the horizon.' f

In the course of the last century the aspect of the
country has been entirely changed. At the present

* ' Revenue Records of the North-Western Provinces, Allahabad,'
1818-1820, p. 202.

•j- 'Travels in India One Hundred Years Ago,' Thomas Twining.
London : J. Osgood Mcllwaine and Co., 1893.

PERMANENT SETTLEMENT POSTPONED 25

day the road from Ko'il runs through an almost un-
broken series of crops and gardens to where Jalali lies
1 bosom'd high in tufted trees.'

The local officers, in reply to the Commissioners,
deprecated a permanent settlement as long as the
country was so thinly populated. They foresaw that
under a settled Government large tracts of land, then
waste, would be brought under the plough, and that
by a settlement made before this land was brought
under cultivation, the Government would be debarred
from all share in the profits of agriculture in these
tracts. The Commissioners themselves, after an ex-
tensive tour, decided that a permanent settlement
would be unwise ' while the population was so limited
compared to the extent of its area.'

The permanent settlement was, therefore, not re-
jected, but merely postponed. It is interesting to
note that those who deprecated the immediate intro-
duction of a permanent settlement did not foresee
what was to Mill the greatest objection to fixing an
immutable tax upon rentals — namely, that in a pro-
gressive society the value of land is always rising
without any effort on the part of the landowners.
1 The ordinary progress of society which increases in
wealth,' Mill truly observes, ' is at all times tending to
augment the incomes of landlords; to give them both
a greater amount and a greater porportion of the
wealth of the community, independently of any trouble
or outlay incurred by themselves. They grow rich,
as it were, in their sleep without working, risking, or
economizing. What claim have they, on the general
principles of social justice, to this accession of riches ?
In what would they have been wronged if society had
from the beginning reserved the right of taxing the
spontaneous increase of rent, to the highest amount
required by financial exigencies ?' In the course of
the nineteenth century the landlords of the United
Provinces did indeed grow richer, as it were, in their

26 THE OWNERSHIP OF LAND

sleep, because the price of agricultural produce rose
enormously with the growth of population, the de-
velopment of means of transport, and the inflation of
the currency, to none of which can the landlords of
India claim to have contributed.

But these arguments against a permanent settlement
were not present to the minds of the English officers
of the first quarter of the nineteenth century. They
were in sympathy with the proposal to fix the land
revenue in perpetuity, but they advised that that
decisive step should be postponed until the country
was more fully populated. The result of this post-
ponement was that they became better acquainted
with the Indian conception of land tenure, and as this
acquaintance deepened they modified their precon-
ceived notions of the absolute proprietary rights of
the landlord. From the first the Government had
shown a laudable desire to make settlements of the
land revenue with the actual landholders and not with
contractors who offered to farm the revenue for them.
They were conscious of their ignorance of essential
facts ; they did not know who the actual landholders
were, and they directed their officers to make inquiries
upon this point. The answers which they received
are evidence of the perplexity into which new names
and unfamiliar proprietary rights had plunged the
English officers. In reply to the Board's circular
regarding tenures (1808) Mr. T. Balfour wrote from
Gorakhpur: 'The ancient landlords, whether under
the denomination zemindar, talookdar, rajah, or baboo,
are admitted to have a proprietary right.' His neigh-
bour, Mr. W. J. Sands, the collector of Bareilly, on
the other hand, describes the 'talookdar' as a person
who held estates in farm from the Government, and
declares that the ' talookdar ' usually asserted no
claim to proprietary rights ; ' there are, however,
some,' he says, ' who from long possession assert a
right, and deny the proprietary right of the village

SUB-PROPRIETARY RIGHTS RECOGNISED 27

zemindars, who, on the other hand, assert claims on
written documents, and as the acknowledged heirs of
reputed proprietors of the soil.' Mr. Sands, however,
fails to arrive at any very definite conclusions. ' The
proprietary right in the soil of the acknowledged pro-
prietors is extremely doubtful. From the great facility
with which in this part of the country deeds are pro-
duced, it is difficult to decide the right, if any should
really exist.'

The result of their study of land tenures was to
convince the English officers that there were in India
sub-proprietors, who had undeniable rights, and that
these rights had been overlooked in the permanent
settlement which was made with the landholders in
Bengal. Sir J. E. Colebrooke, in a minute dated
July 12, 1820, speaks of the 'melancholy results of the
errors of the Permanent Settlement in the Lower
Provinces.' He goes on to say : ' The errors were
twofold ; they consisted, firstly, in the sacrifice of
what may be denominated the yeomanry, by merging
all village rights, whether of property or occupancy,
in the all -devouring recognition of the zemindar's
paramount property in the soil ; and secondly, in the
sacrifice of the peasantry by one sweeping enactment,
which left the zemindar to make his settlement with
them on such terms as he might choose to require.'
Colebrooke was a warm advocate of the principle of
permanent settlement, for he closes his minute with
these words : ' On the eve of finally quitting the
country in which I have resided' forty-two years, and
a service in which, through the early partiality of the
late Warren Hastings in selecting me for Persian
Secretary to the Government as long ago as the be-
ginning of 1780, I have borne an efficient and respon-
sible part from the age of eighteen, I should feel a
true satisfaction if, by the last act of my official exist-
ence, I could flatter myself in having contributed to
secure the blessings of a limited assessment to that

28 THE OWNERSHIP OF LAND

portion of the British territories in which the last
twelve years of an active life have been employed.'
Colebrooke wished to obviate the ' melancholy errors '
of the Permanent Settlement in Bengal by the legal
recognition of the rights of the tenants, occupants,
and sub-proprietors ; he urged that ' a short enact-
ment, declaring the resident tenants to be not re-
movable as long as they continue to pay the same
rent which they have paid during the last five years
or in the last year preceding the year in which the
Settlement with the zemindar will begin to be perma-
nent, would secure, even in these estates, the benefit
of such permanency to every class of the agricultural
community.' Colebrooke's conception of a permanent
settlement was, therefore, of something very different
to the measure which has enriched the landowners in
Bengal. If his suggestion had been accepted, the
landlords of this province would at this day be
receiving a bare 10 per cent, on the rental of the land
under cultivation in 1820. Other officers besides
Colebrooke realized that the tenants and sub-proprie-
tors had rights which the English servants of the
Company had at first ignored. Mr. H. Newnham (in
giving evidence before the Select Committee on the
affairs of the East India Company in 1832) said : 'We
{i.e., the English) recognise no rights in the ryot. I
do not believe we have upheld the rights of the ryot
in any part.' And he proceeded, in words which
show the change which was coming over official
opinion : 'In a few cases there is hereditary affection
between the ryot and the zemindar, so that he sets
his rent to the Government demand ; but in most
cases only the zemindar would profit by a permanent
settlement.'

With the realization of the tenant's rights, it became
clear that no settlement could be made in perpetuity
which did not give legal recognition to these sub-
proprietary rights. As it was impossible to attempt

A RECORD OF RIGHTS 29

legislation until the Government was in possession of
detailed information respecting the various forms of
tenure actually recognised in the country, it was
decided to prepare ' a record of rights ' in every
village or estate before settling the land revenue
which it was to pay. This decision was embodied in
Regulation VII. of 1822, which marks the first depar-
ture from the English doctrine of landownership.

The Regulation of 1822 was excellent in principle,
and indicates the tendency to recognise what I have
called the Indian conception of landed property ; but
the Regulation could not be efficiently worked partly
by reason of some assessment difficulties and parti}''
because of the deficiency of local establishments and
the burden thrown on the settlement officers who had
to inquire into and decide rights at the same time that
they were assessing the revenue. The progress made
under this Regulation was so slow that in the Aligarh
district, for example, only 127 villages were resettled
in seven years, the average being nineteen per annum.
It was evident that at this rate of progress the settle-
ment of the province would be indefinitely postponed,
and after a special committee had sat to look into the
whole matter, an amending law was passed, which is
known to history as Regulation IX. of 1833. The
principles then laid down have never since been de-
parted from, and ever since that date it has ' remained
a distinct feature of the system that the settlement
involved two branches of work — (1) quasi-judicial,
(2) fiscal. The first was concerned with the ascer-
tainment and record of rights, and the second with the
valuation of land and the assessment of the revenue
demand, and the adjustment of rents of tenants.'*

Under Regulation IX. of 1833 settlements were
made for a period of thirty years. The principle of
permanent settlement was not officially discarded, but

* ' Land Revenue and Tenure in British India,' B. H. Baden-
Powell.

30 THE OWNERSHIP OF LAND

with the modification of the English doctrine of land-
ownership the desire to see it introduced declined,
and the decision upon this point was therefore post-
poned. In the course of the ensuing thirty or forty
years the rise in the value of agricultural produce,
followed by a rise in rents, brought home to the
officers of the Government the fact that there might
be a rise in the value of land due to the progress of
society to which the owner of the land had not con-
tributed ; it is probable, also, that they were influenced
by the growth of economic opinion in England, and
the writings of J. S. Mill, which predisposed them to
sympathize with proposals for keeping all increase in
the value of land in the hands of the State. What-
ever the cause may have been, official opinion had
swayed by the time the first settlements made under
Regulation IX. of 1833 came up for revision from the
English doctrine of landownership and approximated
to the opposite theory of land nationalization. Opinion
eventually came to rest on a compromise between the
two extreme views, and the theory now generally held
is that to which I have given the name of the Indian
doctrine of landownership. The right to private pro-
perty in land is recognised, but it is subject to two
limitations, the first of which consists in snaring with
the Government all increments in the income derived
from land, and the second consists in the recognition
of the semi-proprietary right of the tenant to fixity of
tenure.

The Indian landlord may well have thought that
the distinction between rent and tax was a mere matter
of words. What was of practical importance was the
amount which the State collected from him in the
shape of land revenue. The two questions of im-
portance to him were (1) what was the proportion of
his gross income from the land which he would have
to surrender to the State, and (2) upon what principle
the officers of Government would estimate his income.

REDUCTIONS IN THE LAND REVENUE 31

The last is of as much practical consequence as the
first, for if his income is moderately estimated, the
landlord can afford to pay a large proportion of it ;
whereas an assessment which professes to be only a
small proportion of his income may be very burden-
some in fact, if that income has been overestimated.

With regard to the first, the answer is easily given.
In the last hundred years the Government has sur-
rendered to the landlords a constantly increasing pro-
portion of the income from land. The following table*
shows the gradual increase in the share of the 'assets'
which the proprietors have been allowed to retain :

Year.

1812
1822
1832
1849

1855
1885

Share of Assets surrendered
to the Proprietors.

10 per cent, of prospective assets.

20 „

27i „

33S n

5° >,

50 per cent, of actual assets.

It is rather startling to find that the officers who
were desirous of creating a body of English landlords
in India were at the time levying a tax upon land
equal to 90 per cent, of the assets. Nor were their
estimates of the assets lenient. In many cases we
know that their assessments represented an increase
upon the demands of the Government to which they
succeeded.!

These estimates, too, were constantly being revised,
and usually enhanced. The fiscal history of the pro-
vince, until the passing of Regulation VII. of 1822,

* From the 'Statistical Atlas of India,' p. 57.

f In Mainpuri, for instance, ' we find that these assessments were
fixed at a considerable increase on the Jama formerly realized by
the Nawab Wazir's Government, partly, as the Collector admitted,
through higher offers being made, and partly on the summary
inquiries which had been instituted into the capabilities of estates '
(' Mainpuri Settlement Report, 1875,' M. A. McConaghey and D. M.
Smeaton).

32 THE OWNERSHIP OF LAND

was one of constant change. The following settle-
ments were put in force in different districts at slightly
different dates, but in order to give an idea of their
chronological place in fiscal history I give the dates
upon which they took place in Mainpuri :

The First Triennial Settlement ... 1802-3 to 1804-5

The Second Triennial Settlement ... 1805-6 to 1807-8

The Quadrennial Settlement ... 1808-9 to 1811-12

The Quinquennial Settlement ... 1812-13 to 1816-17*

In the eyes of later officers better acquainted with
the people and with scientific principles of land settle-
ment, these early assessments appeared excessive and
very hastily framed. ' The main end ' (of the first
triennial settlement), wrote Mr. McConaghey in 1875,
' apparently seemed to have been to obtain as much of
the gross produce of an estate as possible, compatible
with reservation to proprietors of such a quota as
would not drive them to refuse engagements.' One
mitigation of the severity of the assessments was
found in the ignorance of the officers of the time. Of
the third, or quadrennial settlement, we have a few
details. Mr. Batson, who settled part of Mainpuri,
first gives an account of the precautions against fraud
which he had taken in framing his estimates, and con-
cludes thus : ' Nothing further occurring to me at pre-
sent as necessary to observe on the mode by which I
formed my gross estimate, I have only to remark that
the assessment is by no means equal to what the
pargannah could bear, as I have since the conclusion
of the assessment been informed by a respectable
native, that it is only in the small estates where I have
come near the true assets. He states that in the larger
ones I am sometimes 20 per cent., but in general not
within 30 or 35 and 40 per cent, of the true resources.'

* This settlement was in most districts continued for several
terms of five years — first by Regulation 16 of 1816, then by Govern-
ment order in 1822 ; again from 1827 to the end of 1832.

THE EARLY SETTLEMENTS 33

But in spite of miscalculations such as this the burden
laid upon Mainpuri was, in the opinion of succeeding
officers, unduly heavy.

The same story is told of other districts. The early
fiscal history of Aligarh was very carefully investigated
by Mr. W. H. Smith in his Settlement Report (1874).
He asserts that there was an enormous increase in
the revenue up to 1833; it rose from Rs. 1,929,978
in 1804-05, to Rs. 3,314,022 in 1815-16, or 71 per
cent, in twelve years. No figures are recorded for
subsequent years, but ' we may infer that the total
enhancement of revenue in the territory now forming
Aligarh from 1804 to 1833 was little less than 100 per
cent., and it is certain that the greater part of this
increase is due to the twelve years before 18 16.'
This enormous increase of revenue seems to suggest
an increasing severity of taxation, but the facts do not
altogether bear out this interpretation. The extension
of cultivation was even more rapid than the enhance-
ment of revenue. Before the establishment of British
rule the district was very thinly populated, as was
shown above from the evidence of an eye-witness in
1794, and in 1807 the collector wrote to the Board of
Commissioners that ' the district was in a very un-
cultivated condition in consequence of former misrule,
that frequent revolutions in the Government, the
rapacity of the public officers, and the extortion of the
farmers (of the revenue) had checked the growth of
population, that the ravages of the famines of 1783
and 1793 were not yet overcome, and that the district
was altogether in an impoverished state.' Population
returned to the district and waste land was brought
under cultivation as soon as peace and security were
established. Mr. W. H. Smith's calculations are as
follows : ' I am rather under the mark in concluding
that in 1840 cultivation in Aligarh, even since 181 5,
had doubled, and that since 1803 it must have more
than doubled. In 181 5, too, the revenue rate on culti-

3

34 THE OWNERSHIP OF LAND

vation was Rs. 3/6/5 per acre; in 1840, though the
revenue was increased, it only fell at Rs. 2/3/1 per
cultivated acre. It would therefore appear that while
the most wretched accounts of the district were being
written, and there can be no doubt that the collectors
faithfully gave their impressions at the time, land was
being brought under the plough at a rate increasing
at least 100 per cent, in thirty years.'

There are two infallible tests by which we can
judge whether an old assessment. was in practice ex-
cessively severe or not. The assessment was certainly
excessive (1) if the Government was unable to realize
the demand, and (2) if estates were constantly changing
hands. Judged by the first of these tests, the early
settlements were excessively severe. Inability to
realize the full revenue was a common character-
istic of all the Governments in India in those days,
English as well as Muhammadan. Attempts are some-
times made to give them credit for it by describing
their system as one in which there was great elasticity
of collection. ' Elasticity of collection ' must always
be characteristic of a revenue demand which it is
physically impossible for the people to pay. If the
people cannot pay, the demand must be remitted.
The British Government of the early years of the
nineteenth century are entitled to whatever credit
may be thought to attach to such ' elasticity of collec-
tion.' The revenue demands of the first Triennial
Settlements were rarely collected in full. In Aligarh
Rs. 2,457,253 were demanded for the last year of
settlement, 1807-08, of which Rs. 1,934,385 were col-
lected ; and in most districts ' balances,' as arrears
were then called, accumulated. The proof that the
Collectors were right in anticipating that the country
would recover under a settled government is to be
found in the fact that it was possible to collect the
revenue under the Second Triennial Settlements at
all, although they were not more lenient than the first.

THE EARLY SETTLEMENTS IN ALIGARH 35

As Mr. McConaghey says of Mainpuri : ' Although
heavy balances did accrue, still the collection of the
revenue seems not to have been attended with that
insuperable difficulty which characterized the first
four years of our rule.' As years advanced balances
became less common, and though, to the humane and
scientific Settlement officers who succeeded, these
early assessments appeared excessive, it is clear that
the people must for some reason have been in a better
position to pay them than at the commencement of
the century.

The second test of the severity of the revenue
demand is whether landed property was constantly
changing hands. This question was examined by
Mr. W. H. Smith with considerable care with regard
to Aligarh, and the case of this district may be
accepted as typical of the province. In 181 1 Mr.
Newnham gave a very unfavourable account of the
condition of the people in this district, and as late as
1 83 1 Mr. Stirling described it in even darker colours.'
1 Almost all the villages in this district,' he wrote,
1 have been mortgaged, farmed, or given over to
creditors. A few intriguing, dishonest, and avaricious
men have by indirect means possessed themselves of
the greater portion of the most flourishing estates in
this district. These changes of property have upset
all kinds of village rights and the individual claims of
cultivators, among whom tenfold more distress has
been occasioned than has been experienced in any
district of which I have had charge.' This is the
1 wretched account of the district ' to which Mr. W. H.
Smith refers, and his examination of this charge is
worth quoting. After showing how cultivation had
extended, he goes on to deny ' that almost all the
villages were alienated up to 1831,' and he gives details
and names to show that the old proprietors had in
general maintained their lands, and he concludes
by saying : ' Nowhere can I trace any signs of a

3—2

36 THE OWNERSHIP OF LAND

general movement of property. . . .' The fact that
from 1810-11 to 18 1 3-14, a space of four years,
228 villages were put up to sale and sold for an
average of one year's revenue looks bad in itself; . . .
but land had no marketable value, and no purchasers
could be found ; Government had to buy up at nominal
prices. ... In fact, the zamindars seem to have con-
sidered the sale regulations as a kind of Insolvency
Act, which released them from their embarrassments
and gave them a fresh lease of their villages on more
favourable terms.

' From all the authorities and facts which I have
considered my deductions are as follows : That at the
time of the conquest the entire district was in a terrible
state of disorganization, that population was defective
and much land out of cultivation, that the zamindars
generally were in a depressed and unsettled state,
and that they were called upon to pay a very heavy
revenue* before they had recovered from the injurious
result of former misrule, but that the good effect of
our rule very soon became manifest. With the aid
of remissions and reductions which were largely re-
sorted to — in other words, by lenient treatment — they
tided over times of difficulty. Meanwhile, population
and cultivation alike increased, and within thirty years
there was double as much land under the plough as
before, while the assessment having been, with few
exceptions, left untouched after 18 19, the incidence of
the revenue rate on the cultivated area fell lower and
lower, and at the end the people were paying half the
rate for double the amount of land. No doubt the
revenue was even then heavy, and from time to time
may have caused much individual and partial distress ;
but on the whole the landowners of the district main-
tained their original position, and the general result of

* The rate of Rs. 3/6/5 per acre on cultivated land is proof of
this. It could only have been paid while there was a large amount
of land to bring under cultivation.

MODERN PRINCIPLES OF ASSESSMENT 37

the thirty years was a constantly improved revenue
administration, and in the mass an enormous ameliora-
tion in general progress and prosperity.'

Considering how deeply imbued Mr. W. H. Smith
was with the humane principles which guided the
second settlements made under Regulation IX. of
1833, and how intimately he was himself conversant
with the actual condition of the people, his review
of the fiscal history of the first part of the century
may be accepted as substantially just. Since his day
the rules of assessment have been elaborated in detail,
but the general principles have remained unaltered.

The land revenue in these provinces is now ' 50 per
cent, of the actual assets' of the landlord ; the practice
of fixing the revenue at 50 per cent, of what it was
anticipated the assets would rise to in the currency of
the settlement has been definitely abandoned, and the
proportion claimed by Government is one-half of the
income actually enjoyed by the landlord at the time of
making the settlement. When first Regulation IX.
of 1833 was put into force, the assets of the landlord
were ascertained by an elaborate system of land
valuation : the settlement officer made classifications
of the soil, estimates of the average yield per acre,
analyzed the different crops according to the rent paid
on their cultivation, and instituted elaborate researches
into the prices of agricultural produce. But that
method was soon abandoned, because attention was
more and more drawn to the rents paid by tenants,
and these were accepted as a natural standard of the
value of different lands. In fixing the assessment, the
business of the settlement officer is, therefore, now
circumscribed to the limited, but by no means easy,
task of ascertaining what are the rents actually paid
in the district. When the total rental assets of a
village have been ascertained, there may be some
addition to be made on account of manorial profits
(as it is often the custom to call them), and possibly to

38 THE OWNERSHIP OF LAND

allow for some valuable waste which is not assessable
acre by acre at full rates, but still should not be
allowed to be wholly disregarded. Of the total assets,
from 45 to 55 per cent, is declared to be the proportion
payable to Government as land revenue ; 50 per cent,
is supposed to be the rule, but it has been officially
stated by the Government of India that 'it is not
often, indeed it is rarely, taken.'*

Whether the tax even so reduced is excessive is
a political and not an economic question. There is
only one point of view from which we can consider it
here, and that is whether any further reduction in the
land tax would stimulate agriculture. In the United
Provinces the land is mostly held by landowners who
are not themselves cultivators, but whose income is
derived from the rents which they draw from culti-
vating tenants ; the land tax which they pay is, there-
fore, a tax upon rents. It is hardly necessary to
demonstrate that a tax upon rents does not affect
the agricultural industry itself. To the man actually
engaged in agriculture — that is, to the cultivator — it
must be a matter of absolute indifference whether the
landlord keeps for his own use, or divides with the
Government, the rent which he levies from his
tenants. The amount of rent is determined by com-
petition among the tenants, having in view the advan-
tages which the land offers them, and as long as
private property in land is recognised, it is difficult
to see how the landlord can be prevented from making
a profit out of the ownership of natural advantages
which are restricted in quantity. Rents would be
levied even if there was no Government land revenue,
and would be of the same amount as at present,
because the remission of the land tax would not either
diminish the demand for land or increase the supply
of it. The effect of the land tax is only to reduce the

* Resolution issued by the Governor - General in Council on
January 16, 1902.

INDIAN IDEAS OF LAND OWNERSHIP 39

profits which the landlords draw from the ownership
of a natural monopoly. That those profits are not at
present inconsiderable is shown by the fact that in
the United Provinces the average selling value of
revenue-paying land represents twenty-eight years'
purchase of the land revenue. This is the official
calculation for the year 1899- 1900, based upon the
records of private sales, and from these records it
appears that the price of land is rising, as in 1891-
1892 the prices paid represented twenty-two years
purchase.

The general conclusion to be drawn from the facts
set forth in this chapter is that the Indian system of
land tenure is something intermediate between com-
plete nationalization of land and absolute private pro-
perty in land. To the extent of one-half, the State is
able to appropriate that unearned increment in rental
incomes which is due to the development of the
country, and to this extent to lighten the burden of
the general taxpayer. But except for this contribu-
tion to the public exchequer, the economic position of
the landlord is not affected by the land revenue laws.
He receives rent for the use of the natural and inde-
structible properties of the soil, and he raises that
rent when the growth of population and the develop-
ment of the country makes it profitable to bring
poorer lands under cultivation. The object of the
following chapter is to show how the growth of
population has placed the landlord in a position of
economic advantage when making a bargain with his
tenants, and how the landlord has in the main followed
his own interest with results not very dissimilar to
those prevailing in Ireland. It will afterwards be
shown what restraints have been placed upon him in
dealing with his tenants, so as to give legal effect to
the second limitation upon the power of the landlord,
which I described as characteristic of the Indian con-
ception of landed property.

CHAPTER III

THE COMPETITION FOR LAND : THE LANDLORD AND
THE TENANT

The object of this chapter is to illustrate the action of
competition in determining Indian rents. The legis-
lation by which tenants have been in some measure
protected from the operation of free competition will
be dealt with in the succeeding chapter.

It has sometimes been maintained that in the first
half of the nineteenth century, rents in these provinces
were not determined by competition at all but by
custom. It is difficult to imagine a society in which
economic causes were totally inoperative, and I do
not think that there is sufficient evidence to justify us
in maintaining that such a state of things ever existed
in India. What I believe is true is that the economic
and other conditions of those days were favourable to
low rents and permanence of tenure, and that these
conditions lasted long enough to cause English
observers to believe that they were prescribed by
custom. In the beginning of the nineteenth century
the landlord was not in a position to drive a hard
bargain with his tenant. In the first place, land was
abundant and tenants scarce ; if a tenant was driven
away by harsh treatment, it was almost impossible
to replace him. In the second place, the landlord's
tenants were also his retainers, and their support was
not less important to him in war than in cultivation.
The occasions on which the landlord had need to

40

CUSTOM FAILS TO KEEP RENTS DOWN 41

muster every available fighting man were not rare in
those days. In the States under independent Indian
rulers, there was the annual skirmish with the tax-
gatherer, whose approach was usually resisted by
force of arms. Even under British rule such be-
haviour was not unknown. From 1805 to 181 5 in
the Trans-Gangetic Pargannahs of Farukhabad, ' the
Collector, as a matter of course, took two companies
of native infantry with him, and crossed the Ganges
to get in the arrears of the land-tax. In 1819 the
Board had to send their own Secretary (vencrabile
nomen) to collect the revenue which the Collector
had failed to do.'* There were, besides, raiding
parties of Pindaris to be encountered, as well as the
less formidable visitation of 'Habhuras' (gipsies), or
1 of Banjarahs conveying corn on pack-animals who
devastated the crops along the line of their march,
and hammered the villagers who protested.' t

Under these conditions there was every reason for
the landlord to conciliate his tenants by lenient treat-
ment, and as these conditions had lasted from as far
back as the memory of man could run through the
troubled days of the eighteenth century, and had
endured under British rule for perhaps another
generation, the friendly relations between landlord
and tenant seemed to have the authority of custom.
But it was not a custom sufficiently strong to protect
the weak when the conditions of the land market
were altered to their detriment. In the nineteenth
century, under the pressure of economic forces,
custom, as the arbiter of rents, if it ever existed,
melted away and was replaced by competition. As
early as 1869 this tendency was noticed by observant
officers. ' The tendency of our rule has been greatly
to increase the insecurity of the cultivator's tenure :

* Revenue Reporter, vol. iv., No. 2.

f ' Aligarh Statistics from 1803 to Present Time,' J. R. Hutchinson,
1856, p. 30.

42 THE COMPETITION FOR LAND

(i) The agricultural population has increased so that
competition for land becomes heavier; (2) thezamindar,
having no longer occasion to call his cultivators to
take up arms for him, enters the market more un-
trammelled, and accepts the best cultivator, without
arriere pense'e, as to whether he is as good at quarter-
staff or broadsword play as he is at ploughing.'*

As population continued to increase, the economic
advantage of the landlord became greater, and when
he made use of it to the uttermost he was able to
rack-rent his tenants, so that they hardly retained for
themselves a bare subsistence. There are, of course,
in India many kindly landlords who deliberately allow
their tenants to retain their holdings upon lower rents
than could be screwed out of them under the stress of
competition. There are cases in which lands are let
to poor relations or to members of the same clan at
rents much below the market rate ; in almost every
country the severity of competition is mitigated in
particular instances by this sort of charity or benevo-
lence ; but, upon the whole, the landlords of this
province have taken full advantage of the competition
for land among the cultivating class ; and custom,
unless strengthened by law, individual benevolence, or
tribal sentiment has proved quite unequal to protect
the tenant.

There are two ways of paying for the use of land :
either (a) by surrendering to the landlord a share of
the crop, or (b) by a cash payment which does not
vary with the success of the harvest. The first of
these methods is probably much the older of the two,
and in one form or other it appears to have existed all
over the province. Owing, however, to the difficulty
of actually dividing the harvest on the threshing-floor,
modifications of this simple system have been intro-
duced, which go by different names in different
districts. The following represent the systems most
* Revenue Reporter, vol. iii., No. 1, 1869.

VARIETIES OF METAYER RENT 43

prevalent in these provinces, but it should be re-
membered that the names have not in all districts
exactly the same connotation :

1. Batai: A division of the crop upon the threshing-
floor. The landlord's share varies from one-third and
two-fifths to one-half.

2. Kankut : An estimation of the standing crop upon
which the share to be paid by the tenant in grain is
appraised. The custom is that the agents of the land-
lord visit the fields when the corn is ripe, and decide
that the produce will equal, say, 50 maunds of grain ;
the landlord's rent being one-half or two-fifths of the
gross produce, his share of the produce upon the field
will be 25 or 20 maunds.

3. Amaldari : A term which I have not met with
out of Rohilkhand in this technical sense, but which
is a convenient method of distinguishing this par-
ticular development of kankut. Amaldari proceeds
upon a similar estimation of the standing crop, and a
further estimation of the cash value of the landlord's
share. Thus the landlord's share = two-fifths of a
crop of 50 maunds, or 20 maunds. The current price
of grain is supposed to be, let us say, 20 seers per
rupee — i.e., Rs. 2 per maund — and therefore the land-
lord's rent in cash = Rs. 40.

These are all varieties of Metayer tenure, and the
working of this system in India is worth studying at
some length, partly because of its historical impor-
tance, and partly because it affords a fair opportunity
of testing Mill's saying, that 'when the partition is
a matter of fixed usage, not of varying convention,
political economy has no laws of distribution to in-
vestigate.' So far from this being the experience in
India, English observers have shown how unscru-
pulous landlords can, under any of the forms of the
metayer system, raise the rent to the utmost that the
tenant can pay, and can elude the restraint of custom
while pretending to observe it. Mr. E. Alexander, in

44 THE COMPETITION FOR LAND

the Final Settlement Report of the Moradabad Dis-
trict (1881), has made a most valuable study of the
subject :

1 1 have sometimes come across the idea that one
great advantage gained by the tenant under batai was
the impossibility, at all events, the great difficulty, of
their rent being enhanced, except in so far as was
gradually and inappreciably effected by the increasing
value of the produce. But as a matter of fact this
advantage is purely mythical. Even granting that the
zemindar has not the power of directly enhancing the
rate, the history of the additional impost called kharch
(to say nothing of cesses like dhala and nazar) will
serve to show on what an unsound basis the theory
rests. The origin of kharch (lit. = expense or charge)
was almost beyond doubt the payment made out of
the produce before division to the different village ser-
vants, such as the blacksmith and the patwari. To
this the non-resident landlords soon added a charge
to defray the expense of the servants they employed
to watch and divide the crops after they were cut.
Theoretically these men protected the tenant's share
against thieves as well as the zemindar's, and they
also saved the tenant from the expense, which the
landlord argued he ought to bear, of carrying the
latter's share to his store-house for him. Rightly or
wrongly the burthen was soon too tightly fixed to be
shaken off, and in most villages it has been steadily
added to on one pretext or another. The landlord
soon found that it was an excellent contrivance for
bringing up the rents of the men paying light rates to
something near the same standard as those of the
other tenants, and accordingly we now find that, except
in a few exceptional cases where the tenant is pur-
posely privileged by the landlord's own free will, most
of the light batai rates are burdened with a heavy
kharch. In most of the pargannahs the kharch has,
under the Board's rule, been amalgamated with the

CESSES IN ADDITION TO RENT 45

rent, and the total only is stated in the Jamabandi
(Revenue Statement), that is, supposing the rent to be
one-third, or 13 1/3 seers per maund, and the kharch
to be 4 seers, the rent would be entered at 17 1/3 seers
without detail ; but in Thakurdwara, where the rough
khatauni was made out before the order was issued,
the full details were recorded, and are still to be found
on many of the inspection slips which Mr. Crosthwaite
had prepared.

1 From these it is clear that the allowance to the
patwari (rasum), and to the village servants (kamina),
and to the poor (sauri), are all different from kharch,
and do not as a rule vary according to the rate of batai,
being generally deducted from the whole crop, whereas
the kharch is usually paid from the tenant's share only,
and is almost always heavier on those who pay the
lighter rates.

' The more grasping zemindars have further enhanced
their claims by demanding additional petty payments,
such as the following :

1 1. Khakhma : About half or three-quarter seer per
maund to make up for the dust which the zemindar
assumes has got mixed up with his share of the pro-
duce and has thus added to its weight.

'2. Nazar: Theoretically a present to the zemindar's
karinda (agent) for his trouble in supervising the divi-
sion of the crops, converted by some zemindars into a
regular payment of a rupee, or rather less, from all the
well-to-do tenants in addition to their regular rent.

1 3. Biaha : A benevolence on the occasion of wed-
dings in the zemindar's family.

'4. Wazan kashi : A fee on the weighments of the
grain ; evidently a preposterous demand in addition to
kharch, but still taken in some cases.

' 5. A percentage of about an anna in the rupee over
and above the fair current bazar price in cases where
the zemindar takes the value of the grain instead of
the grain itself from the tenant. This is still more

46 THE COMPETITION FOR LAND

unjust, as it is literally making the tenant pay extra for
having the trouble and expense of disposing of the
produce put on him. Nevertheless, some zemindars
are not above taking it.

'6. Dhala : This is both the most iniquitous as it is the
most important of these legal exactions, and to explain
it I must first briefly describe the custom of amaldari.
I have already mentioned that amaldari is usually
employed like kankut, to signify the appraisement of
the standing crop before it is cut, in contradistinction
to the term batai, signifying actual division of the pro-
duce. How the practice first arose is not clear, but very
likely it was suggested by the zabti (cash rents paid on
certain crops) rates. Regarding these, in many villages
it became customary for each tenant to be bound to
give a certain area of zabti* crops on each plough he
held. The area corresponding with the term plough
was not very accurately laid down, but the number of
ploughs each tenant was supposed to hold was known,
and on this the calculation proceeded. This custom
soon developed into the tenants paying the zemindar
at zabti rates on a certain area, whether he grew zabti
crops or not, the tenant being allowed, if he had not
the full area of them, to select a sufficient area out of
the land occupied by his other crops to make up the
total. Of course he naturally picked the best fields he
had of these other crops (as paying the zabti rates
they escaped batai), and very likely the idea may have
occurred to some tenant, when he had an unusually
fine crop, to offer to pay in cash on a certain further
area for that particular year. To this the zemindar
probably demurred unless he paid in cash on some
field with a poor crop on it, and finally the matter
would very likely be settled by the tenant's paying in
cash on his whole holding after a valuation of the
different fields.

* Particularly expensive crops like sugar-cane and cotton, for
which cash rents are usually paid.

CESSES IN ADDITION TO RENT 47

'To a non-resident zemindar, not desirous of keeping
up the custom of division for any ulterior object, the
system would naturally possess great attractions, and
it is quite easy to conceive of his overcoming the
objections of other tenants by allowing them to pay
the amount of the estimate in grain instead of in money.

' And once introduced, the convenience of the system
would soon cause it to extend and take a firm hold on
the people. The tenants would find themselves free
to cut the crops as soon as they were ripe, and free to
store and sell them when they liked ; the zemindar, on
the other hand, would find himself relieved from the
vexatious task of watching the crops and dividing
them, besides in most cases escaping the cost of carry-
ing off his share in kind. Thus, as first introduced,
the system was probably of mutual advantage almost
everywhere. Unfortunately the opportunities it gives
for oppression were too great to be long resisted, and
in the hands of the less respectable zemindars, and
especially in those of the karindas, it has now become so
misused that the tenants almost universally entreat to
be allowed to keep to actual batai in spite of all its
inconveniences. The appraisement has to be made
just when the crop has ripened, almost immediately —
that is, before it should be cut, and when any consider-
able delay must cause it to deteriorate. To the tenant
the loss of even one crop often means ruin, and the
landlord or his karinda have thus a hold on each of
them individually, which they well know how to use.
The appraisement made is therefore usually as high as
they think it possible to go, but as it is common to all
humanity to make mistakes, so occasionally the crop
turns out better than they thought it would be. It
was on some occasion of this sort that the idea of
dhala struck one of them. The crop, he argued, had
turned out about 20 per cent, better than had been
expected ; therefore, the least the tenants could do in
justice was to pay up at least 10 per cent, more over

48 THE COMPETITION FOR LAND

and above the value of the zemindar's share as first
calculated. The same argument was applied with less
reason in cases where the selling price of the crop
turned out more than usual, though here the zemindars
got the benefit just as much as the tenant, and in pro-
cess of time the dishonest and grasping landlords,
without any just ground whatever, extended the system
till they made dhala into a demand always claimable
against the tenant, unless the crops turned out much
worse than had been estimated, and further levied it
on a sliding scale, which invariably brought up their
demand to just about as much as they could possibly
squeeze out of the tenant.

4 It is very clear evidence, I think, of how much the
zemindars have got the better of the tenants in this
part of the country — that demands which are clearly
illogical and unjust have become almost universal.
Such, for instance, is the demand for kharch on
amaldari at the same rates as on actual batai, though
the zemindar is put to little or no expense in it where
(as is usual here) the tenant pays him the value of his
share in money. So is the demand for kharch on
zabti crops, which is nearly universal ; so, though less
apparent, is the enhanced rate of kharch taken from
tenants paying favourable rates in batai; and so most
emphatically is the custom of taking dhala, which is
very common.'

But the evil of the Metayer system in India is not
confined to the exactions by which the landlord eludes
the restraint of custom. The very argument which
the Ricardian economist urged against the system —
viz., that it weakened the incentive to industry — is
constantly found in the mouths of practical settlement
officers, who had little interest in vindicating abstract
theories of economics.

Mr. Smeaton in his report on the Hasanpur par-
gannah writes :*

* 'Moradabad Settlement Report, 1881.'

DEFECTS OF THE METAYER SYSTEM 49

'The conditions on which the peasantry now live
and till the soil are adverse to any solid progress. As
long as the landlord can come into the field, on the
threshing-floor, and take away half the tenant's
harvest, so long will the tenant grudge any labour
beyond that which is necessary to raise his food.
The great incentive to industry is wanting. He
knows that the more he toils the more he will have
to yield to his landlord. In the Bilari pargannah
rents are in money, and the rates paid are (now)
undoubtedly high ; but a Bilari J at* would laugh
anyone to scorn who would suggest a change to even
the most lenient batai'

Similarly, Mr. W. H. Smith in the Aligarh Settle-
ment Report (1874) says: 'Mr. Thornton . . . very
rightly called batai equally "a sign and a cause of
inferiority of produce " ; it is a sign because it only
obtains on bad land, and it is a cause because no
cultivator cares to devote much time or labour when
he is conscious that so comparatively small a share
of the resulting produce will fall to his share. The
invariable tendency of batai is to produce careless and
thriftless cultivation.'

There is another very practical difficulty in carrying
out the actual division of the grain harvest, which
must always have favoured the introduction of kankut,
and eventually led the way to cash rents, and that is
the difficulty which a landlord, with many tenants,
must have experienced in superintending the division
of the crop on many distant threshing-floors within a
reasonable time after the harvest. Mr. Moens, who
undertook the defence of batai, states this objection to
it very fairly : f

' It directly tends to promote fraud and cheating of
every description. The cultivators endeavour and

* The J&ts are notoriously sturdy and hard-working cultivators,
f 'Report on the Settlement of the Bareilly District, 1874,'
S. M. Moens.

50 THE COMPETITION FOR LAND

generally succeed in abstracting considerable quanti-
ties of grain before it comes to division. To check
this the landlords are compelled to protect their own
interests by employing men to watch the crops from
the time they ripen. The tenant cannot cut his crop
when it is ready ; he must wait till |the landlord is
ready and able to supervise the operation through
his shahnas, or watchmen, and so with every subse-
quent process till the actual division. The tenants
are thus taught to depend not so much on the exercise
of their own industry, as on the success of their plans
to defraud the landlord, who is compelled to exact
more than his proper share by way of reprisal. The
batai system gives a tyrannical and grasping landlord
such a power over his tenants that their condition
often becomes one of almost pure serfage.'

1 One of the greatest evils of batai,' wrote Mr.
Boulderson in 1830, 'is the necessity of watching the
crops till the division takes place. This not only
compels a heavy expense, but it creates incessant,
wearying, harassing interference between landlord
and tenant — makes a constant sore and irritation
where a good feeling is particularly requisite. Very
considerable portions of the produce of the land are
yearly lost under this system. If a landlord wishes
to ruin a tenant, he has only to hold off from dividing
the crop till the rain comes down and rots it, or the
same effect will follow from his not being able to
attend or depute an agent. This often occurs with
regard to the rabi* crop. In this year very large
quantities of grain have been totally destroyed or
greatly damaged by an unexpected heavy rain with-
out the fault of either party. Only, however, the
batai estates suffered, where the division delayed the
cultivator in storing or selling his produce.' (Mr.

* Wheat, barley, gram, etc., which are reaped in March and
April ; the monsoon rains break at about the end of June, but
thunderstorms and local showers frequently occur in May.

DELAYS IN THE DIVISION OF THE CROP 51

Moens notes that the same loss happened from the
same cause in April and May, 1871). 'If the tenant
thinks the landlord too hard upon him, he absents
himself from the division of the crop, and goes and
petitions the collector, being certain thereby of
harassing the landlord, and being for the time, at
least, reckless whether he involves himself also in
loss by the destruction of the produce.

' I fully acknowledge the truth of every word of the
above extract ; I have myself found rice cut in October
and still undivided and not even threshed or win-
nowed in February. It lay rotting while the wretched
cultivators were almost starving on grain borrowed
at ruinous interest.' Mr. Alexander declared that such
cases were by no means exceptional. ' My own ex-
perience over a large part of Hasanpur and Amroha
was that in every village which I rode through the
cultivators came running up and begged for permission
to cut their fields, or for an order directing the land-
lord to estimate the crop before it deteriorated. I am
quite willing to allow that in most cases the cause
was indolence, and in some niggardliness, rather than
actual malevolence. The landlords are mostly non-
residents, and often grudge the money necessary to
maintain a sufficient establishment to complete the
estimates in several different villages within the
proper time, and before the day the landlord has
bestirred himself, or the agent worked round to the
village, damage occurs to the crop. But be the
cause what it may, the fact of damage and loss to the
tenant still remains, nor have I ever known a single
case in which the landlord has, without compulsion,
made any restitution for loss.'

Mr. Moens's close observation and his care in
recording economic facts has created in me a strong
respect for his memory, and I am unwilling alto-
gether to disregard what he has to say in favour of
the batai system. In spite of the damaging admissions

4—2

52 THE COMPETITION FOR LAND

which I have just quoted, he proceeds to maintain
that the batai system ' has very great counter-
balancing advantages.' The eight reasons which he
gives for his opinion may be thus summarized :
i. Batai is the custom of the country.

2. The rate of division is determined by custom
over large tracts of country, so that there is little
probability of rents being decided by competition.

3. The landlord gets a fair profit on improvements.

4. It is a form of rent self-adjusting to a rise or fall
in prices.

5. Under batai the tenant is not liable to be turned
out of his holding with debts to the village money-
lender.

6. Under batai the landlord helps to replace lost
cattle.

7. The tenant under batai usually borrows from the
landlord and not from the professional money-lender
(bania), and thus is able to get money at a lower rate
of interest.

8. The system of batai creates a tie of self interest
between landlord and tenant.

Mr. E. Alexander, who had seen in the Moradabad
district the evil results of batai when worked harshly
examines these arguments seriatim. Nos. 1 and 4 he
admits to be true ; of No. 2 he says that it is equiva-
lent to saying that it is an advantage to be paying so
high a rent that no one could possibly pay more and
make a living out of the land. In answer to No. 3
Mr. Alexander curtly remarks that he has never seen
any improvements made by a landlord, and that No. 5
is true of batai, but not of amaldari, which is a very
common development of the former. With regard to
No. 6, all depends upon the state of feeling between
the landlord and tenant, and so it does in a village
paying cash rents. As to No. 7, Mr. Alexander denies
that the landlord is a better creditor than the village
money-lender ; he is just as pressing as the bania, and

THE DECLINE OF METAYER RENTS 53

has a firmer grip. As for the supposed advantage
contained in Mr. Moens's eighth argument, Mr.
Alexander denies it emphatically, and states it as his
experience that ' batai' villages are much worse off
than ' cash ' villages.

Although I have devoted considerable space to the
consideration of the Indian Metayer tenure, the reader
should understand that the system is falling into desue-
tude. In 1830 Mr. Boulderson wrote that rents over
four-fifths of the district of Moradabad, or 80 per cent.
of the cultivated area, were taken in kind. At the
revision of the settlement by Mr. Alexander in 1881,
he found 64*3 per cent, of the land cultivated by
tenants paying money-rents, instead of only 20 per
cent., and this does not take into account commuta-
tions affected by him. In 1863 the Government had
enacted by law that either tenant or landlord could
claim a forced commutation of rents from kind to
money ; and this provision was so largely made use of
that nowadays it may be said generally that batai only
survives upon tracts of land where the crop is excep-
tionally precarious.

Among the many causes which helped to bring
about this change there is one which is worth calling
attention to, because we are likely to overlook it now-
adays. Cash-rents were rare at the beginning of the
nineteenth century, because money and specie were
rare ; it was the enormous importation of silver and
the diffusion of coined money over the country during
the second half of the nineteenth century which made
money-rents possible. The Board of Revenue very
acutely remarked in 1834 : ' Where batai rents prevail,
the cause is usually to be found in the actual state of
wealth and commerce of a district, and the Board
believe that any attempt to effect a conversion to
money-rates, before the state of things in a district
admits of the payment of rent, generally through the
wholesale grain merchants, bankers, or that xlass of

54 THE COMPETITION FOR LAND

people who have constant money dealings with the
cultivators of the soil, must fail'

The inconvenience of the system of batai both to
landlord and to tenant was probably the reason of its
speedy disappearance as soon as the alternative of
money-rents had become practicable. Indian land-
lords have explained to me that their objection to the
system is that it is impossible to prevent theft on the
part of the tenant ; as soon as the crop is ripe the
tenant and his family convey part of it away at night.
What reasons the tenant has for disliking the system
we have already seen. The following extract from
Mr. Alexander's report suggests another reason for
the transition from grain shares in the produce to
cash-rents :

'The first change probably took place when some
more enterprising tenant undertook the cultivation of
crops like cotton or sugar-cane, which required a good
deal of trouble and expense. It is easy to imagine
how the zemindar grudged finding the capital, or how
the tenant grudged giving the labour under the system
of actual division, and also the further complication
which arose from the zemindar in some cases not
having any immediate use for his share of the division.
At first, at all events, this payment, which is locally
known as zabti, does not seem to have been fixed, but
to have varied according to the result of the experi-
ment. Not improbably it represented the actual value
of the zemindar's share, after deducting expenses, and
therefore necessarily varied according to the produce.
Even where its maximum became fixed, it was prob-
ably for long customary to allow a reduction if the
crop turned out badly, and this principle is still recog-
nised by liberal landlords, unless the zabti (cash) rates
are very low. It was most likely some time before
the tenant was understood to take the whole risk and
pay a fixed amount for certain, whether the crops
turned out well or ill.'

RACK-RENTING 55

But whether the cultivator's tenure be based upon a
division of the crop or upon a cash bargain, Indian
experience shows that under a system of unrestricted
competition he is quite unable to hold his own against
the superior advantages of the landlord. One example
must suffice to show what misery a body of landlords
may produce who manage their landed property with
a sole view to their immediate material interest.

' In other pargannahs] wrote Mr. Alexander in 1881,
1 1 generally found that forces favourable to progress
had been greatly predominant. The case is different
in Amroha. Stimulating and retarding causes have
been equally matched. Hindrances to improvement,
unknown, or only here and there felt in other pargan-
nahs, have been chronic here. It would be necessary
to examine these in detail in order to determine in
what direction Amroha has been moving during the
last thirty years, and at what stage of progress or
retrogression it has arrived.

1 Two characteristics of this pargannah which have
to be borne in mind are, first, that is a tract of country
most of which is held free of revenue ; and second,
that the Syeds were in former times and still are the
leading proprietary body. At the last settlement, as
far as I can ascertain, nearly three-quarters of the
pargannah were owned by the Syeds. Since then
they have lost nearly half of their property through
extravagance. Their places have been taken by
Mahajans and Vishois chiefly. But even still the
Syeds are, as a body, the most influential proprietors
in the pargannah. Some of their customs, both good
and bad, are still retained by their successors, many,
of course, have disappeared. The custom of taking
rent in kind, which prevailed all over the Syed pro-
perties, is still current. Money rents are not common.
The proprietor's shares are generally one-half, two-
fifths, and one-third of the crop.

' When grain collections are made with a decent

56 THE COMPETITION FOR LAND

amount of honesty and liberality, and where thorough
supervision is maintained over the underlings or
middlemen through whom they are made, or better
still, where the principal in a spirit of fair dealing
makes them himself, the system of grain rentals may
be unexceptionable ; indeed, in certain tracts and
among certain classes of tenantry it may be the best.
But nothing can be more demoralizing to a people,
industrious and thrifty by nature, than such a system
badly managed ; or worse still, worked with the sole
object of extorting as much as can be squeezed from
the tenants.

' Now, my experience leaves me no doubt that the
custom of grain rents has been much abused in
Amroha. In the ancestral Syed estates I found un-
mistakable evidence of long-standing abuses. As
remarked in a former part of this report, the Syeds
look upon the land as their absolute property, and
seem to consider themselves entitled to its whole pro-
duce, barring only a share sufficient to feed the tillers
of the soil. I do not think I exaggerate in saying that
they ignore any rights in land save their own, and
that, consequently, they refuse to recognise any claim
by a tenant to profit. Everything above and beyond
the bare food of the cultivator is, in their opinion,
theirs by right. Their practice has been all along and
still is in strict accord with this theory. They pay
but little regard to the convenience of the tenantry at
harvest-time. The grain is not unfrequently allowed
to lie for days and weeks on the threshing-floor, not-
withstanding the earnest entreaties of the cultivators
to have the division made. When, after much dun-
ning, the landlord consents, the village is beset with a
horde of underlings. These men, with their servants
and bullocks, live in the village till the last grain of
the harvest is duly accounted for, and are not in a
hurry to depart. When the division has been com-
pleted, the tenant generally finds a much larger hole

RACK-RENTING 57

made in his grain-heaps than he had anticipated ; and
if you ask him whither it has all gone he is just as
bewildered as you are, and just as unable to tell.
Havildars' wages, weighing expenses, village ex-
penses, that fiction so dear to landlords, transit
expenses, nazr bhent* and food of attendants make
away with most of what would have been the tenant's
little profit. Where kanknt is the custom, the burden
on the cultivator is still greater. He has to bear the
cost of a couple of landlord's agents, sometimes also
the landlord himself, a couple of kanias or appraisers,
a couple of chainmen, and the patwari with their
servants and bullocks. This is, of course, during the
process of estimating the crop. Then if the landlord
takes the grain and not a money equivalent, there is
the division to be gone through on the threshing-
floor. Not infrequently, however, the landlord takes
the money value of his share of the grain ; when he
does, he prices the grain at 2 seers or less in the
rupee higher than the current market rate. Add to
this that the estimates made of the crop are in nine
cases out of ten in excess of the actual out-turn, and it
will be seen that the Amroha tenant's lot is indeed a
very hard one.

' Money rents are not common ; where current, the
procedure is analogous. Working on both fears and
hopes, the Syed proprietors — muafidars (i.e., land-
lords exempted from the payment of land revenue)
chiefly — force up the rates by a variety of devices.
At one time they wheedle the tenants into paying a
lump sum on the plough (ha/sari) ; at another, under
pretence of relaxing the plough rate, of which the
tenants are weary, they revert to a fixed rate (always
enhanced) on the bigha.\ Not infrequently, with a
degree of cunning which almost does them credit,

* Complimentary offerings, similar to the ' forced benevolences '
exacted by the Tudor kings,
f Land measure = § acre.

58 THE COMPETITION FOR LAND

they affect to take the villagers into their confidence;
they make over the whole of their lands to the culti-
vating community, represented by three or four head-
men, at a lump sum in excess of any previous rental.
This artifice I found to be not at all an uncommon
one. The tenantry are informed that their landlord
has been graciously pleased to elevate them to the
dignity of independent lessees at a certain rental. The
people, deeming their freedom from perpetual inter-
ference cheaply bought by the enhancement of their
rental, and elated by the concession of a quasi-inde-
pendence, gladly accede, leaving the distribution of
the big rent for amicable adjustment over their hukas
(pipes) in the chupal. The lease agreement is gener-
ally a stamped document, sometimes for a fixed period,
sometimes with no period specified. As long as the
tenants hold on and pay without breaking down and
taking to their heels the watchful landlord keeps them
to their agreement. When at last the burden be-
comes intolerable and the crash comes, and the
villagers pray to get back their old holdings with their
separate quotas of rent, they find their landlord has
been too much for them. Restore them to their hold-
ings he will, but on very different conditions to those
under which they held before the fatal lease. The
lease, their landlord rules, — and his ruling with its
semblance of legality is law to them — has cancelled all
old occupancy rights, and the cultivators are at his
mercy. A redistribution of lands is made — another
agreement patched up — the needful enhancement
never being lost sight of, and things go on again for
a while.

1 Even rack-renting, if conducted in a regular and
understood system, may be borne after a fashion.
When to it is added a state of perpetual change, and
when tenants are never certain what their landlord's
next whim may be, the evil is aggravated. In whole
tracts there really has never been any sort of fixity in

RACK-RENTING DEVICES 59

the mode of taking rent or in the cultivator's tenure.
As I have just described, the pyrbatai of this year is
transformed into kankut next year. After a short
period money-rents are introduced. On these, again,
a variety of changes is rung. The bigha rate of one
year vanishes into the halsari, or plough-rent, next ;
and then a lump lease to the whole tenant body closes
the round, ending generally with the destruction of all
rights of occupancy previously acquired.

'But this is not all; lessees, generally strangers, are
frequently let loose upon the people. My experience
of these persons is not in their favour. They have
not even the lingering spark of scruple which may
sometimes have restrained the rapacity of their prin-
cipals ; they do not know, and they do not care to
know, the people ; and in their turn they work through
a hired agent, with what results it is not difficult to
guess.

'The effect of this sort of treatment is to impoverish
and depress the people. It would be a miracle if the
Amroha cultivators, patient and industrious as they
are, enjoyed the prosperity of their Bilari and Sambhal
brethren. In those tracts the tenant is stimulated by
the prospect of a fair return for his labour. He has a
tenure, too, which is respected by his landlord. He
may be called a happy man. The goad which urges
the Amroha tenant is far oftener despair. He sticks
doggedly to his plough, and holds on at his well for
sheer love of life and nothing more. The aspect of
his field may differ but little from that of a Jat's field
in Sambhal, just as the handiwork of a life-prisoner
may differ but little from that of the " free independent
mechanic."*'

I have quoted this detailed picture of the behaviour
of the landlords of Amroha not because I believe it
to be typical of the relations between landlord and

* 'Final Report on the Settlement of the Moradabad District,
1881, by E. Alexander.

60 THE COMPETITION FOR LAND

tenant throughout the province, but because it shows
that where Indian landlords seek only their imme-
diate pecuniary interest there is no custom or indi-
genous institution strong enough to restrain them from
using their position of economic advantage to the
uttermost, and that the Indian peasant is no more
capable of making an equal bargain with his landlord
than the Irish cottier tenant. A system of land-tenure
based upon unrestricted competition, might be bene-
ficial to landlord and tenant where both parties were
in a position to negotiate on terms of equality. Under
a system of perfect competition no landlord would
accept less than the highest rent he could get for his
land, and no tenant would take a lease by which his
profits would be smaller than he could obtain for a
similar investment of labour and capital in another
industry. Such perfect competition can only exist
where the competitors for land are large farmers with
capital, as in England, or where, as in large towns,
merchants and business men are able to calculate
exactly the pecuniary advantage of a certain site ; but
it is obvious that these are not the conditions under
which rents are paid by an ignorant peasantry who
know little of any other industrial conditions than
those of their immediate neighbourhood, and who can
follow no other calling than that of husbandry.

The evil results of this unequal competition are not
confined to the immediate sufferers, but are necessarily
cumulative, and tend permanently to depress and
degrade those classes of tenants, so that it is well-
nigh impossible for their children ever to remedy their
situation. The low-caste Hindus, whose portion for
centuries has been oppression and contempt, are in a
particularly disadvantageous position in bargaining
with their landlords. Under the Syed landlords
described above, ' there is a marked difference in the
position of the sturdier Muhammadan tenants (like the
Turks in a few villages in the north of Sambhal and

UNEQUAL COMPETITION 61

the south of Amroha), and the low-caste Hindus. The
former have always stood up boldly for their rights,
and the landlords were afraid of bullying them, know-
ing that they were capable of turning, if driven too
far, whilst the latter, as Mr. Smeaton noted, though
they might shriek and even threaten occasionally,
ended by submitting, even though they died under
the burden.'

CHAPTER IV

FIXITY OF TENURE : THE LANDLORD AND THE
T EN AN T— Continued

The last chapter was devoted to considering the re-
sults that follow from unrestricted competition for
land. Extreme cases were cited to show how a land-
lord who pursued without hesitation his own pecu-
niary interests, could deprive his tenants of all the
profits of agriculture beyond the barest sustenance.
It is never wise to expect that a whole class of men
will pursue a course of conduct which is opposed to
their pecuniary interest ; it is more prudent to assume
with Mill that ' the majority of landlords will grasp at
immediate money and immediate power ; and so long
as they find cottiers eager to offer them everything, it
is useless to rely on them for tempering the vicious
practice by a considerate self-denial.'

This is the assumption which has been at the bottom
of the legislation by which the tenant has been given
a legal right to fixity of tenure, and such legislation
has been the more easily passed in India because it is
but the formal recognition of a principle which has
always been understood to govern the relation between
landlords and tenants. As early as 1820 Colebrooke
had protested against 'sacrificing the yeomanry' to
English conceptions of landownership and against
' merging all village rights, whether of property or
occupancy, in the all-devouring recognition of the
zemindar's paramount property in the soil.' The

62

TRADITIONAL RIGHTS OF THE TENANT 63

English officers who carried forward Colebrooke's
views gradually put away their English preposses-
sions and accepted the Indian view of a dual owner-
ship of land. They argued that the tenant in India
had a beneficial interest in the land which, before the
establishment of British rule had been generally re-
spected, and that it was now the duty of Government
to give statutory recognition to these vague but indu-
bitable rights.

This was accomplished in the course of the nine-
teenth century, but it is only fair to recognise that
these enactments were innovations in Indian law.
Although sub-proprietary rights were generally recog-
nised, and were part of the tradition which governed
the village, it cannot be maintained that the position
of the tenants had ever been legally defined before the
days of British rule. ' It is simply impossible to point
to any time when there was any law that a tenant
(whether under a person practically the landlord, or
under the State regarded as landlord) could not be
ejected or have his rent raised so that he could not
afford to keep the land ; there was, no doubt, a certain
popular feeling on the subject, notably that the de-
scendant of the first clearer of the land, or one who
had helped to found a village, had a permanent
hereditary right. On the other hand, there was
always the principle that might was right ; — in the case
of every despotic ruler and every land officer under
the pressure of stringent demands from the Treasury
Department. Whatever might result from the con-
flict of these two sentiments, there was this important
corrective that the landlords never wanted to turn out
a cultivator as long as he would work diligently; they
were only too eager to keep him. Consequently, the
right to eject a tenant was not a matter that occurred
to anyone to consider; while as to "enhancement," if
an overzealous collector or greedy contractor made
his demands so high that the cultivator was forced to

64 FIXITY OF TENURE

take flight, he would readily find land to cultivate, and
protection for his person, on a neighbouring estate.
This must naturally have secured the cultivating
class, independently of the sentiment of hereditary
right above mentioned. Fortunately, also, this heredi-
tary sentiment made the old tenants strongly attached
to their lands, and they would strain every nerve to
pay a high rental rather than abandon the ancestral
holding. Naturally, then (as without cultivation there
is no revenue), all tolerably good rulers encouraged
and protected, if they somewhat highly rented, their
old resident tenants.'*

The manner in which this traditional sentiment was
embodied in successive legislative enactments was
summarized by the great Famine Commission of 1880.
I cannot do better than reproduce here that part of
their report :

' It has always been an accepted principle in India
that the occupant of the soil is entitled to remain there
from generation to generation, provided he pays the
portion of the produce which may be demanded of
him by Government, or by some superior holder or
landlord, and this proportion has generally been fixed
by local custom. But the tenant was often in a posi-
tion to enlarge this right, and place it on a firmer
basis. As a rule, the superior holders, unless they
carried their tenants with them, and had their support
in war as well as in cultivation, could not make head
against the officers of the Native governments who
practically exacted the maximum amount that could
be paid, and hence the tenants had to be conciliated
by privileges such as low rents and fixity of tenure.
In the less populous tracts, again, the same result
was produced by the fear of the tenant absconding,
and by the impossibility of replacing him. Rights of
this kind, when once acquired, were naturally con-

* ' Land Revenue and Tenure in British India,' B. H. Baden-
Powell, p. 137.

ORIGIN OF OCCUPANCY RIGHTS 65

served and strengthened by the general feeling that
whatever is old ought to remain unaltered. The
Native Governments also threw their weight into the
same scale by reason of their knowledge that the
payment and growth of the revenue depended on the
contentment and prosperity of those who cultivated
the soil, and hence it was commonly made a condition
of the tenure of the superior holder that he should
not only pay the Government revenue, but also should
foster the spread of cultivation, and keep the ryots
contented.

1 When the early British rulers began to look into
the question, they were universally impressed with
the belief that the rights of the tenants were co-
ordinate with those of the landlord, and equal to his
in point of permanence. The authors of the Perma-
nent Settlement in Bengal considered the position of
the tenant no less entitled to protection and security
than that of the landlord, and undoubtedly intended
to place the one on as assured a footing as the other.

' The same regulation (Regulation I. of 1793, Article 7)
which created the rights of the zemindars contained
the proviso that — " It being the duty of the ruling
power to protect all classes of people, more particu-
larly those who from their situations are most helpless,
the Governor-General in Council will, whenever he
may deem it proper, enact such regulations as he may
think necessary for the protection and welfare of the
dependent talukdars, ryots, and other cultivators of
the soil." It was added that no zemindar should be
entitled to make any objection to his assessment on
this account.*

* The opinion quoted above differs somewhat from the view
which I took in the preceding chapter, and which is supported by
the authority of Mr. H. B. Baden-Powell. All the members of the
Famine Commission of 1880, with the exception of Mr. H. E.
Sullivan, held the opinion that the land revenue was to be regarded

5

66 FIXITY OF TENURE

1 The rights thus asserted in the case of the Bengal
ryot existed, there is reason to believe, in a more or
less complete form in every part of India. " There is
a very general consent," writes Sir W. Muir, " that in
the native state of things the resident ryot, simply as
such, is throughout the continent of India possessed,
as a rule, of a right of hereditary occupancy at the
customary rates of the vicinity." But such a right
was liable to become obscure under a system in which
the landholders were recognised as possessing virtual
proprietorship in the lands for which they paid revenue,
and the intentions of the Government to provide for
its adequate maintenance, were for a long period
not carried into execution. With the lapse of time it
became more and more difficult to ascertain what were
the precise rights of tenants, and what were the cus-
tomary rates of rent. . . .

1 While the theory was that all existing rights should
receive equal attention, and while the benefit likely to
accrue to the cultivators was avowedly one of the
principal objects of the settlements made for long
periods, there grew up a generally exaggerated esti-
mate of the proprietary rights of the landlords, and a
corresponding depreciation of the tenant's position.
English ideas of proprietorship were allowed to
obscure the important limitations to which in India

rather ' as a rent paid by a tenant, often a highly favoured tenant,
to a paramount owner than a tax paid by the owner to the State' ;
they were therefore inclined to the view that the limitation of the
landlord's right had always been recognised by the legislature. I
am of opinion that even in Cornwallis's time there were English
officers who understood the Indian theory of landed proprietorship,
and that it was to these men that the insertion of the proviso con-
tained in Article 7, of Regulation L, of 1793 was due, but that these
men were in the minority, and that English conceptions were
generally in the ascendant. For this reason action was not taken
to enforce the proviso of which the minority had secured the
insertion ; its significance was not realized until the bulk of official
opinion had become strongly antagonistic to the English doctrine.

TWO CLASSES OF TENANTS 67

proprietorship was subject, and a tendency arose for
the landlord to become an absolute owner, and the
cultivator a rack-rented tenant at a competition rent.

' The most important legislative attempt to stop this
tendency and to declare what were the different classes
of tenants, what rights they respectively possessed,
and on what basis the claims to such rights should
be adjudicated, was made by passing Act X. of 1859,
which for many years was the sole embodiment of the
law of landlord and tenant for all the provinces in-
cluded in the Bengal Presidency.

vj> \Lf >j> -V StL

1 The main principle established by this law was
that undisturbed occupancy during a period of twelve
years should be the condition for acquiring immunity
from arbitrary ejectment or enhancement of rent.
Thus the cultivators became divided into two broad
classes — the privileged and the unprivileged. The
former, or the occupancy tenant, can only be ousted
by decree of Court, in consequence of non-payment
of rent ; and his rent cannot be enhanced except by a
decree of Court on certain specified grounds, of which
the principal one is, that he is paying at a lower rate
than is usual among other tenants of the same class
as himself for land of equal value. The unprivileged
class, or tenant-at-will, on the other hand, is liable to
be ousted at the pleasure of the landlord at the close
of any agricultural year, and his rent can be enhanced
to any sum which the landlord chooses to demand.
If, however, he or his ancestors have continued in
uninterrupted occupation of the same land for the
space of twelve years, he acquires by that lapse of
time a right of occupancy in his holding, and ceases to
be a tenant-at-will.

1 In the North-Western Provinces in the earliest
regular settlements (made under the provisions of Regu-
lation VII., 1822, and Act IX. of 1833) rent rolls were
drawn up, in which all tenants residing and cultivating

5—2

68 FIXITY OF TENURE

land in the village were recorded as in permanent
occupation of their holdings, and their rents were
fixed by the settlement officer on the understanding
that they were not to be enhanced during the term
of settlement. By the passing of Act X. of 1859, pro-
vision was made for the first time for the separation
of the two classes of tenants, according as they had,
or had not, cultivated their lands continuously for the
space of twelve years, and for the enhancements of
the rents of occupancy tenants on certain specified
grounds by a decree of the rent court.

tt #f ♦ ♦ %

1 In 1873 an amended Rent Act was passed, which
prescribed stricter rules for the decision of enhance-
ments suits, and created a new class of "privileged"
tenants — viz., those who had been proprietary culti-
vators but had lost their proprietary rights by sale or
otherwise, though still remaining on the land as culti-
vators. The number of tenants at fixed rates in the
permanently settled districts has not yet been re-
corded. The occupancy-tenants hold 41 per cent, and
the tenants-at-will 31 per cent, of the cultivated land,
the balance being tilled by the proprietors themselves.
It is estimated that the former class number about
1,500,000 and the latter about 1,200,000, the average
area cultivated by each tenant being 4*8 and 4 acres
respectively.

' In Oudh, where the great landowners (or taluk-
dars) were more powerful and masterful in former
times, it has been decided that occupancy rights were
altogether unknown at the time of annexation, and the
bulk of the cultivators hold as tenants-at-will. Occu-
pancy rights have, however, been conceded as a com-
promise to those who were formerly proprietors, and
had not been altogether deprived of their rights by
the talukdars. There are in Oudh nearly two million
tenants, holding 3*1 acres apiece on an average. . . .J

' Although the intention of the legislation of recent

THE OCCUPANCY RIGHTS STRUGGLE 69

years has clearly been to define and protect the rights
of the tenants, it is proved by the evidence before us
that the effect produced has been very different from
the object aimed at. From all quarters it is reported
that the relations between the landlord and the tenants
with occupancy rights are not in a satisfactory state,
and are becoming yearly more and more hostile ; so
much so that a landlord will generally refuse any aid
to his occupancy-tenants when they are in difficulties,
and will do all he can to ruin them and drive them
off the land. The reason for this hostility is that an
opposition of interests has been created between the
two classes; the occupancy-tenant possesses a bene-
ficial interest in the land, and intercepts a portion of
the profits which the landlord would obtain if he were
able to exact from him the full rent which he can
obtain from a tenant-at-will. The landlord is natur-
ally but little anxious to help a tenant who is in a
position, or on the road to it, in which his rights will
make him comparatively independent of his landlord ;
and the fact that such rights are in constant course
of accrual frequently results in an equally constant
series of efforts on the landlord's part to prevent such
accrual taking place. When it has been effected, the
landlord's object is to harass the tenant and to
diminish the value of his occupancy rights by bring-
ing suit after suit for the enhancement of the rent.
The probable result of such a struggle is in favour
of the more powerful combatant, and there is reason
to fear that in many parts of the country the occu-
pancy rights have been irretrievably impaired, and the
point to which the efforts of the Government should
be directed is, therefore, to remove this conflict of
interests. . . .

1 We can, however, feel no doubt that in all the
provinces of Northern India, and particularly in
Bengal, it is the duty of the Government to make
the provisions of the law more effectual for the pro-

70 FIXITY OF TENURE

tection of the cultivator's rights. This opinion is
primarily based on the historical ground that they
have a claim as a matter of strict justice to be replaced
as far as possible in the position they have gradually
lost ; but it may also be supported on the economical
ground that in the case of these large cultivating
classes security of tenure must have its usual bene-
ficial effect, and that, as a rule, the cultivators with
occupancy rights are better off than the tenants-at-
will. Wherever inquiry has been made, it has been
found that in all matters relating to material pros-
perity, such as the possession of more cattle, better
houses, and better clothes, this superiority lies on the
side of the occupancy-tenants, and the figures in the
preceding paragraphs also show that, as a rule, they
hold larger areas of land. Where the subdivision of
land among tenants-at-will is extreme, and in a
country where agriculture is almost the only possible
employment for large classes of the people, the com-
petition is so keen that rents can be forced up to a
ruinous height, and men will crowd each other till the
space left to each is barely sufficient to support a
family ; any security of tenure which defends a part
of the population from that competition must neces-
sarily be to them a source of material comfort and
of peace of mind, such as can hardty be conceived by
a community where a diversity of occupations exists,
and where those who cannot find a living on the land
are able to betake themselves to other employments.'

In consequence of the recommendations of the
Famine Commissioners a-Rent Act, known as Act XII.
of 1 88 1, was passed, and for twenty years regulated
the relations between landlord and tenant. The eco-
nomic tendencies which had been detected by the
Commissioners were, however, slow in asserting them-
selves ; the opposition of interests which had been
created between the landlords and tenants became
apparent only gradually, and it is doubtful whether

LANDLORD AND TENANT IN 1886 71

there was at that time a pronounced antagonism
between the two classes. It is true that as early as
1882 the Board of Revenue noted the existence of ill-
feeling, and explained that ' the main, though by no
means the only, reason of the antagonism between the
two classes is what is known as the ' twelve years
rule.' But the Local Government in reviewing the
Revenue Administration report was not convinced
that this ill-feeling was general. ' Some officers,' the
Government remarked, ' (especially in the western
parts of the Province), unhesitatingly report that the
antagonism between landlords and tenants, as classes,
exists, and is becoming more embittered. But others
find no such widespread and increasing unfriendliness
as to give rise to any special and immediate anxiety
for the welfare of the agricultural community at large;
while in the great majority of districts the land held
in occupancy right forms a large proportion of the
cultivated area, and the positions of the tenants is one
which they seem generally well able to preserve and
maintain.' From time to time, however, disquieting
evidence was brought to light ; in Bulandshahr, for
instance, the result of a special inquiry was to prove
that ' since the last settlement the occupancy area had
decreased by 29 per cent., and that the tenant -at-
will area had correspondingly increased, and that the
rise in rents over the tenant-at-will area had been no
less than 40 per cent.' In 1886 the Lieutenant-
Governor (Sir Alfred Lyall) completed a close in-
quiry into the working of the existing law, with a
view to ascertain the importance which ought to be
attached to such facts as those recorded from Buland-
shahr. Sir A. Lyall summarized the results of his
inquiry as follows :

1 After making every allowance for error in the
returns, and for the oppressive action of individual
landlords in certain localities, these figures for the
Meerut Division and for the Province as a whole, are

12 FIXITY OF TENURE

unquestionably remarkable and largely reassuring.
They show good cause for believing that at the pre-
sent time the landholders are not, as a body, actively
adverse to the accrual of occupancy rights ; that the
relations between them and the tenants are usually
not unfavourable to the tenancies of a lengthened and
permanent character ; and that occupancy right holds
its own place on the whole steadily and extensively in
the land system of the North-Western Provinces (Pro-
vince of Agra). These returns demonstrate beyond
question that a very large area, containing probably
most of the best land in the province, is held by
cultivators whose tenancies have exceeded twelve
years in duration, and who possess either an acknow-
ledged title permanently to occupy the soil as long as
they pay the rent, or a strong claim, prima facie, to do
so. They likewise leave no doubt that the exertions
made continuously by the administration of the pro-
vinces, during the last fifty years, to preserve and
uphold this important element in its land system had
not been unsuccessful, and they lead to the general
conclusion that if the area held under a right of occu-
pancy is not greater than it was, it is at least no less.'
Economic tendencies take time to make themselves
manifest, but their action is not for that reason sus-
pended. The conflict of interest between the land-
lord and tenant over the accrual of occupancy rights
was certain in time to produce antagonism, and a
contest between the two classes. The landlord's view
of their proprietary rights had been moulded to a con-
siderable extent by the law, and that law was, at least
partially, inspired by English conceptions of land-
ownership, and the landlords can hardly be blamed
for acquiescing readily in a view of landed property
which was so eminently in harmony with their interests
The growth of occupancy rights diminished the value
of their property, and as this was increasingly realized
the landlords set themselves steadily to oppose their

ACCRUAL OF OCCUPANCY RIGHTS 73

accrual. There were three processes to which they
had recourse to gain this end. (1) They prevented
the actual accrual of occupancy rights by granting
short term leases, which under the law were then a
bar to the acquisition of such rights ; this method was,
however, but sparingly employed, as the landlords of
the Province have a marked aversion to granting
leases. The usual tenure on which land is held by
tenants-at-will is a year-to-year tenancy. (2) The
second method employed was to alter the tenant's
holding from year to year so as to preclude proof of
continuous occupancy of the same plot for twelve
years. (3) But by far the commonest practice was to
eject the tenant before the twelve years had expired,
and so to bring about a technical termination of his
tenure. When legal evidence of this had been estab-
lished, the landlord would generally readmit the man
whom he had evicted as a new tenant, at the same or
an enhanced rent. The extent to which this method
was practised is shown by the remarks made by the
Board of Revenue on the subject of ejectments in suc-
cessive years.

Extract from the Revenue Administration Report
for 1891-92, p. 33 :

' Applications for ejectment of tenants-at-will under
section 36, rose from 57,875 to 64,353, an increase of
6,478. . . . The main object of landholders in issuing
these notices doubtless is to prevent the accrual of
rights of occupancy before the twelve years period of
occupation has been completed, more especially where,
and at times when, enhancement of the rent is possible.
It seems reasonable, therefore, to connect the increase
in notices of ejectment in the western and central dis-
tricts with the state of the harvests, and to conclude,
as several officers have done, that these notices tend
to become more numerous when the seasons are pros-
perous. Among others, the Commissioner of Agra,
who has given careful attention to the working of the

74 FIXITY OF TENURE

ejectment sections of the Rent Act, thinks that the
circumstances of the year in his division show con-
clusively that a rise in suits and applications follows
from prosperity. He notes that in Muttra, Etah, and
Etawah there has been a reduction in revenue, and
that this, taken with the favourable harvests, has led
to an increase in litigation. Mr. Neale's remarks on
the subject may be quoted. He writes :

1 " The leading idea in the zemindar's mind when
the harvests are good is to increase his rent either by
direct suit or by the terrors of ejectment. The tenant
in the latter case generally submits ; it is cheaper, at
all events for the moment. In my opinion zemindars
are not anxious as a rule to evict their tenantry. They
are not governed by the ' commercial principles ' of
the West. It is rather the obstinate right of the occu-
pancy defaulter whom they attack. The ne'er-do-
weel tenant they let alone from compassion, partly
from the feeling that he is always in their power, and
partly because they hope to grind something out of
him in future years. But they have, as a body, no
intention to let the budding occupancy-tenant grow to
maturity, nor to pass by a good harvest without
securing some of the extra profit to their own share.
This spirit is extending ; it is essentially the modern
spirit. And as our rent laws are conceived in that
spirit we should not be surprised if it produces its
natural result." '

The same story was told in the Revenue Adminis-
tration Report for the succeeding year 1892-93 :

' Applications under section 36 for ejectments of
tenants-at-will rose from 64,353 to 65,665, an increase
of 1,312. . . . The increase (in the Agra division) is
ascribed, like that of last year, to the excellence of the
harvests, and the improvements in the condition of
the deteriorated tracts in the division. Thus the
Collector of Etah writes : " Up to date the cry has
been for more tenants, and ejectments were sparingly

THE LANDLORD AND TENANT STRUGGLE 75

employed. Now, on the contrary, a reaction has set
in. Land seems more valuable. Tenants who gave
up occupancy land in times of distress reassert claims
to it. Landlords, on the other hand, oppose such
claims, and endeavour in all other cases to render
impossible the acquisition of rights of occupancy. . . ."
The increase in Rohilkhand was most marked in Mora-
dabad, where 568 more notices were issued than in the
previous year. The Collector again reports acute
tension between landlords and tenants, and remarks
on the constant resistance of the landlords to the
growth of occupancy rights, which secure to the tenant
a fixed cash rent.

'There is little to be added to the remarks on the
subject of ejectment notices that were made in the last
report ; and the statistics of the year under review
support, on the whole, the conclusions then stated,
that these notices tend to become more numerous
when the seasons are prosperous. Besides this, the
approach of settlement in some districts is intensifying
the struggle between landlords and tenants over rights
of occupancy. This struggle is the inevitable result of
the law in respect to occupancy right, which confers
fixity of tenure on those tenants who succeeded in
retaining their holdings for a period of twelve years ;
and it is by no means to the ultimate advantage of the
majority of the tenants who engage in it. The un-
doubted benefits of the tenancy clauses of the Rent
Act are attended by a serious drawback in the amount
of litigation which they produce.'

In the following year the Board (Revenue Adminis-
tration Report, 1893-94) recorded that 'applications
under section 36 for ejectment of tenants-at-will rose
from 65,665 to 72,105, an increase of 6,440.

There was reason to believe that some unscrupulous
landlords had recourse to other means that were
less legitimate than simple eviction for preventing
the accrual of occupancy rights, and an uneasy con-

76 FIXITY OF TENURE

viction arose that the area held by occupancy tenants
was being steadily reduced. In consequence of this
conviction the Government instituted an inquiry, which
resulted in showing that in 1882-83 the percentage of
occupancy on the whole tenant area was 63*92, and in
1897-98 the area held by occupancy tenants had fallen
to 58*38 of the whole tenant area. This investigation
proved that the position of the tenant in what is now
known as the Province of Agra had deteriorated, and
that whereas Sir Alfred Lyall's figures warranted the
inference that in less than half the normal period of a
settlement the occupancy area had increased 7 per
cent., the later figures showed that there had been a
retrogression of approximately 5 per cent., and it was
believed by some of the ablest officers of Government
that this retrogression was due to the unsatisfactory
state of the law.

The Government accordingly decided to introduce
a Bill still further to improve the position of the
tenant. This Bill met with spirited opposition from
the landlords of the province, who contended that it
was not just to infringe the rights of the whole pro-
prietary body because a few landlords had abused
their privileges. They further argued that the legis-
lation proposed in the Bill was inexpedient, because
experience proved that the attempt to give legal
precision to the tenant's right to considerate treat-
ment had embittered the relations between landlord
and tenant. The result of past legislation had been
to create a divergence of interest between the owner
and the cultivator of the land ; the right of occupancy
was a diminution of the value of the landlord's
property, and a coveted addition to the tenant's
possessions. It was inevitable that there should be
a constant struggle for the acquisition or retention of
this valuable property. The answer to this defence
of the unqualified ownership of land was in effect that
it is never prudent to assume that the majority of men

CLASSES OF TENANTS 77

will in the long-run act against their own pecuniary
interest ; that in the present day the competition for
land is so keen that the landlord can secure rents
which leave the tenants only a bare subsistence ; that
it was amply proved from specific instances that some
landlords did use their privileges oppressively. It
was clear that neither traditional custom nor natural
benevolence could be depended on to protect the
tenant, and that the only alternative was to secure
the tenant in the possession of his privileges by legal
enactment. The view of the Government prevailed,
and in 1901 the North-Western Provinces {i.e., Pro-
vince of Agra) Tenancy Act became law. It is this
Act which at the present day regulates the relations
between landlord and tenant.

The following classes of tenants are now recognised
by law :

(a) Permanent tenure-holders;

(b) Fixed-rate tenants ;

(c) Ex-proprietary tenants ;

(d) Occupancy tenants ; and

(e) Non-occupancy tenants.

Tenants of the first two classes (a and b) are con-
fined to the permanently settled districts in the
Benares division, and enjoy the privileges which were
defined by the Bengal Tenant Law of 1885. They
really constitute a class of sub-proprietors ; the rent
cannot be enhanced, and the holder cannot be ejected
except for some express breach of the conditions of
tenancy.

(c) The ex-proprietary tenant holds a position of
exceptional privilege ; he is a tenant with a right of
occupancy in his sir land (or home-farm), and in the
land which he has cultivated continuously for twelve
years at the date of the transfer, and he is entitled to
hold the same at a rent which shall be 4 annas in the
rupee (i.e., 25 per cent.), less than the rate generally

78 FIXITY OF TENURE

payable by non-occupancy tenants for land of similar
quality and with similar advantages of situation. ' It
is important to remark on this,' says Mr. B. H.
Baden-Powell, 'that everywhere in India the loss of
a proprietary (or superior) position on land and the
descent from a landlord, or a co-sharing right,* to a
tenant does not always or frequently imply the actual
loss of cultivating possession of at least a part of the
land. To this day, if an unthrifty village co-sharer
gets into the toils of the money-lender, and first
mortgages his land and then submits to the foreclosure
of the mortgage, he does not leave the land ; he culti-
vates as before, only that now he is the tenant of the
purchaser, and has to pay rent in cash or kind. And
the same thing always happened when a purchaser or
other person, obtaining the lordship by grant or
aggression, was not of the agriculturist class. He
could not till the fields himself, and unless (excep-
tionally) he wanted a better class of tenant, he would
retain the quondam owner or holder of the fields.
Very often a new overlord would be unable to get
other tenants, or circumstances compelled him to con-
ciliate the existing holders.'!

(d) Tenants who have held the same land con-
tinuously for twelve years have a right of occupancy
in such land.

(e) Non-occupancy tenants are tenants of less stand-
ing than twelve years; they were known in former
Acts as tenants-at-will.

It was in the definition of the tenants in these two
last classes that the most important changes of the
law were made. With regard to (d) occupancy tenants,
1 the same land ' is so defined as to mean ' any land
owned by the same landlord.' In order to prevent
landlords from resisting the accrual of occupancy

* A co-sharer — a member of a body of joint proprietors of an
estate.

| 'A Short Account of the Land Revenue,' etc., p. 138.

LONG-TERM LEASES 79

rights, what the law of 1901 declared was in effect
this : That the right of occupancy should in future be
acquired by the existence of the relation of landlord
and tenant between the parties for twelve continuous
years, although the land held may have been different
at different times. This provision was intended to
neutralize the practice of shifting the tenant's holding
from one part of a big estate to another.

As the general object of the Government was to
induce the landlords to give their cultivators some
fixity of tenure, another means for compassing that
end was also attempted in the Act. If the landlords
did not wish that their tenants should acquire any
rights, they were, at least, to grant them long-term
leases, and for this end it was enacted that 'no tenant
shall acquire a right of occupancy in any land which
he holds as a lessee, under a registered lease for a
term of not less than seven years.' It was hoped that
the landlord, who realized how easily occupancy rights
could be acquired under this Act, and who still wished
to prevent their accrual, would consent to give his
tenants long-term leases, as no lease of less than seven
years operates as a bar to the accrual of occupancy
rights.* The law of 1881 had been that occupation
under a written lease did not count towards the
acquisition of these rights of prescription, and the
landlords could thus bar the accrual of rights by
short-term leases for a term of one year or upward.

The other change of capital importance introduced
by the Act of 1901 related to the ejectment of non-
occupancy tenants ; in substance the Act provides as
follows : The non-occupancy tenant on first admission

* So far the landlords have not availed themselves of this
provision. In the last Moral and Material Progress Report, I find
the following : ' At present the number of seven-year leases has
been small, and amounted to 8,517 only in 1902-03, of which 5,093
were in the Meerut division, where the provisions of the Act appear
to be best understood.'

8o FIXITY OF TENURE

to a holding may pay whatever rent may be agreed
upon between himself and his landlord. Once admitted
to the holding, he can only be ejected on certain
grounds specified in the Act. The effect is that if the
real motive of the landlord in suing to eject the tenant
is to get rid of him and resume the land, the court
will decree the tenant's ejectment ; if, however, the
court finds that the notice has been issued because
the tenant has refused to pay a higher rent, the court
will give the tenant the option of accepting a 'fair'
rent or of vacating his holding. If the tenant agrees
to the rent fixed by the court, he will then be entitled
to retain his holding for seven years on the rent so
determined, and will be deemed to be holding under a
lease for such a term, and the period will not count
towards the establishment of an occupancy right.

It is obvious that the intention of this Act is greatly
to facilitate the growth of occupancy rights, and that
it is framed in imitation of the Bengal Tenancy Law,
the acknowledged success of which has been beyond
expectation, and under which it is believed that 90 per
cent, of the cultivators of Bengal have obtained occu-
pancy rights. The result will be, unless the landlords
acquire the habit of granting long-term leases (of which
at present there is no indication), to establish in the
province of Agra a dual proprietorship in the soil. It
is an interesting question whether the process will
stop here, whether what I have termed the Indian
conception of land tenure is, at least in so far as it
relates to the tenant, a stable basis of land tenure, or
whether it is only a transitional conception leading to
full peasant proprietorship, the proprietary rights of
the landlord being satisfied by a quit-rent or some
other compensation for the loss of his undoubted and
legally recognised rights in the land. The example
of Ireland seems to suggest that the present form of
tenure is transitional. Sir Horace Plunkett's thoughtful
book on ' Ireland in the New Century ' contains many

THE ANALOGY OF IRELAND 81

passages which present such illuminating analogies
between India and Ireland that I cannot refrain from
quoting what he says about the Irish agrarian legisla-
tion of the last twenty-five years.

1 Whatever may be said in disparagement of the
great experiment in 1881, there can be no doubt that
it enormously improved the legal position of the Irish
tenantry, and I for one regard it as a necessary con-
tribution to the events whose logic was finally to
bring about the abolition of dual ownership. . . . Mr.
Gladstone found the land system intolerable to one
party ; he made it intolerable to the other. For half
a century laisscz /aire was pedantically applied to
Irish agriculture, then suddenly the other extreme
was adopted ; nothing was left alone, and political
economy was sent on its famous planetary excursion.

'When Mr. Gladstone was attempting to settle the
land question on the basis of dual ownership, the seed
of a new kind of single ownership — peasant proprietor-
ship— was sown through the influence of John Bright.
The operations of the land purchase clauses in the
Church Disestablishment Act of 1869 and the Land
Acts of 1870 and 1881 were enormously extended by
the Land Purchase Acts introduced by the Con-
servative party in 1885 and 1891, and the success
which attended these Acts accentuated the defects
and sealed the fate of dual ownership, which all
parties recently united to destroy. In other words,
Parliament has been undoing a generation's legislative
work upon the Irish land question.'*

* ' Ireland in the New Century,' by the Right Hon. Sir Horace
Plunkett. Third impression, p. 25.

CHAPTER V

AGRICULTURAL INDEBTEDNESS : THE PEASANT AND
THE MONEY-LENDER

By some writers the village money-lender is branded
as a parasite upon industry, as a Shylock who grinds
the faces of the poor, and the cause of more than half
the troubles of the rural community. By others he is
described as the village capitalist, whose function it
is to finance the agricultural industry. It would be
easier to apportion to him the praise or blame which
is his due if we could say definitely whether he is a
capitalist or a usurer; but this we cannot do, as he is
generally both in varying degrees. A capitalist is one
who lends wealth which is employed for the produc-
tion of more wealth, and this function is certainly per-
formed by the village money-lender and grain-dealer.
It is he who advances seed for the sowings, who pro-
vides the cash to buy plough-oxen, and very often the
money to procure agricultural implements. But in
other dealings which are not less common he plays
the part of a usurer. The word usurer has not, as
far as I know, ever been given an exact connotation,
but it is, I believe, capable of precise definition. By a
usurer I understand a man who derives a profit out ol
the necessities of his neighbours, who uses their dis
tress and their hunger as a means of extorting un-
reasonably high payment for the services he renders
them. The usurer's opportunity consists in the
urgency of his client's need. A man who is on the

82

THE USURER 83

point of starving can no more make a judicious bargain
with the person who offers him the chance of a meal
than a drowning man can debate the price he shall
pay to a bystander for throwing him a rope from the
bank. The moral reprobation which attaches in all
countries to the usurer's trade is based upon the
human instinct that a man has no right to exploit the
miseries of his fellows for his own profit. As in the
economic conditions of primitive society there was
little scope for the use of capital (in the true sense),
the loans of those days were usually made to persons
in distress, and it was the usurer's harshness in turn-
ing that distress to his own advantage which was con-
demned in the old prohibitions against usury. To the
modern economist usury differs from interest in this,
that the principal lent is not devoted to the production
of more wealth, but to the immediate satisfaction of
human wants. The difference of the use to which the
principal is put in the two cases is the cause of the
difference in the rates which are paid for the loan. A
man borrowing capital for productive purposes is able
to calculate exactly the rate of interest which he can
afford to pay, and interest is therefore never in excess
of the profit which it is estimated that capital will
yield. But the alleviation of misery is not capable of
quantitative estimation, and the poor wretch in distress
is ready to promise anything which will procure him
the immediate satisfaction of his wants. It must, in
fairness to the usurer, be confessed that all loans for
which usury is taken are not contracted under the
compulsion of want. An unthrifty villager, foi
instance, may borrow for the marriage of his son o.
the prosecution of a lawsuit larger sums than his
resources justify. In this case the usurer does not
exploit the necessities of his client, but his want of
forethought, his weakness under social pressure, or
his vindictiveness ; the value of this loan to the
borrower cannot be subjected to any arithmetical

6 — 2

84 AGRICULTURAL INDEBTEDNESS

test, and there is no reasonable calculation made,
such as limits the rate of interest paid upon true
capital. In this case, too, the principal is spent un-
productively.

Whether this distinction between capital and usury-
be admitted or not, I wish to press for recognition of
the fact that the money-lender's advances to the
villager, for the support of himself and his family
during the lean months before the harvest, are not
capital. It is usual, I know, to include the food of the
labourer in capital on the ground that it enables the
labourer to play his part in the production of wealth.
But I contend that men work in order to eat ; they do
not eat in order to work. Wealth which has satisfied
a human want has discharged the ultimate aim for
which it was produced, whether the want satisfied be
the poor man's hunger or the rich man's love of osten-
tation. Capital, in my opinion, is wealth in such a
form that it is incapable of satisfying human wants
directly. A plough, a steam-engine, or an irrigation
canal, cannot directly satisfy human wants ; they are
valuable only because they help to produce things
which will directly satisfy human wants. Seed, which
has always been recognised to be an ambiguous case,
is made unfit for human use when it is placed in the
ground — when, that is to say, the owner decides to
employ it as capital. The older economists would
have objected that wealth could not be produced unless
the labourers were supported until the harvest was
ripe or the work finished upon which they were
engaged. I admit that a store of provisions is a neces-
sary anterior condition to the production of all elaborate
forms of wealth ; if civilization is so little advanced
that the community has not a sufficient store of food
to carry it on from seed-time to harvest, the people
must obviously betake themselves to fishing, hunting,
and those means of obtaining food which give a quick
return. But there are many other characteristics of

THE LABOURER'S FOOD NOT CAPITAL 85

civilization which are equally indispensable to the
production of elaborate forms of wealth, such as in-
telligence, education, power of realizing the future,
and security of life and property, yet no one would
dream of classing these among capital. I therefore
contend that the food of the labourer cannot be called
capital; his food, his house, and his clothing are the
objects for which he labours ; they constitute the
material life of the man, and according as they are
good and sufficient is he capable of attaining the full
development of his nature. To look upon them as
fuel to the human machine is to mistake accidental
and secondary attributes for essentials. In the study
of economics we should never forget that wealth was
made for man, and not man for wealth.

It is obvious that the loans which the peasant con-
tracts to celebrate his son's marriage or to conduct a
lawsuit are not capital ; and if to these two frequent
sources of debt is added, as I contend should be, the
advance which the money-lender makes to the peasant
for food, it will be seen that there is a large class of
loans which ought not to be considered under the
head of capital. The Indian money-lender is therefore
at the same time a capitalist and a usurer, and his
services must be balanced against his dis-services,
when we consider the part he plays in the rural com-
munity.

It appears to be thought, because the Indian money-
lender takes a high rate of interest (or usury) and
turns the miseries of his poor neighbours to his own
advantage, that he must be an exceptionally rapacious
person, and the chronic indebtedness of the cultivator
is held to indicate an abnormally morbid condition of
the rural economy of India. This is not the case ; the
rapacity of the money-lender and the indebtedness of
the peasantry of India are neither exceptional nor
abnormal. They are characteristics of agricultural
life everywhere. They are characteristics which it

86 AGRICULTURAL INDEBTEDNESS

should be the object of all public men to remove, and
they are amenable to remedial treatment ; but we shall
be better able to understand the case of the Indian
cultivator if we recognise that his condition is not by
any means abnormal — that, on the contrary, the small
farmer all over the world is constantly in debt.

As Sir F. A. Nicholson says at the beginning of his
invaluable Report upon Land and Agricultural Banks,
' the lesson of the universal history from Rome to
Scotland is that an essential of agriculture is credit.
Neither the condition of the country, nor the nature of
the land tenures, nor the position of agriculture, affects
the one great fact that agriculturists must borrow.'

The facts upon which Sir F. Nicholson bases this
generalization are of so much interest to students ol
Indian economic conditions as to justify a somewhat
lengthy extract.

' Probably nowhere in the world except among the
richer farmers of England is sufficient capital owned
by the farmer himself; even the English farmer, with
the advantage of renting land largely developed by
his landlord's capital, and finding, therefore, only the
working capital, is accustomed to borrow freely from
his banker, whether for advances at seed-time, for
purchase of manure, for extra wages at harvest, etc. ;
this he usually does by a short bill, or, in Scotland, by
a cash credit. But in Europe, where small and medium
cultivation is the rule, and where the farmer so fre-
quently owns the land he tills, the bulk of the farmers
are in debt, and that heavily ; the necessary comple-
ment, in fact, of the peasant proprietor is the money-
lender. There is little or no waste land, so that all
land has to be bought or inherited ; the purchase
price, owing to severe competition and love for the
land, is extremely high, returning only a small per-
centage to the most diligent labour; succession duties*

* The State taxes on the transfer of property in Europe are very
high. In France an ordinary sale pays 6^ per cent, duty, or ^65 on

INDEBTEDNESS OF SMALL PROPRIETORS 87

are very severe, amounting often to 1 1 per cent.
Under the law of equal partition among heirs, it is
necessary, since many estates are too small to sub-
divide, for one of the heirs to take the property and
pay the value of the shares to the coheirs ; this money
he raises by mortgage at heavy interest. Hence the
land itself is a very costly article, and absorbs, in its
mere acquisition, often far more than the peasant's
available capital, which is supplemented, therefore, by
heavy mortgages at high interest. Again, owing to
the pressure of population, intensive cultivation, with
its expensive implements, manures, and methods, is
necessary ; this demands a large working capital, while
the incessantly increasing taxes, imperial, provincial,
and commercial, whether on the land itself, on the
houses, or on succession, registration, etc., continually
involve greater expenditure. Losses, moreover, are
very frequent ; abnormally bad years are known in
Europe as in India, while the diseases of the vine and
silk worm, the ravages of drought, excessive rain and
hail, have caused incredible loss,* only to be counted
in hundreds of millions sterling, all of which, together
with the loss of produce and heavy fall of prices for
many years, has to be borne by the farmer-proprietor.

a sale price of ^1,000 ; a gift at marriage is taxed at about 3^ per
cent, of the value if to a son, at about 7 per cent, if to a nephew,
and at 11J per cent, if to a more distant relative or stranger; an
inheritance is charged with succession duty of i^ per cent, if to a
son, and at rates up to iij per cent, in other cases; the capital is
arrived at in cases other than sale by multiplying the rent or real
income of the estate by 25. The above are simply the transfer
duties, and are exclusive of other fees, whether notarial or State.

* For instance, it is stated that in France alone, in the two years
1879 and 1880, no less than 2,147,500 acres of vineyards were
entirely destroyed by the Phylloxera and frost. In Prussia, in the
three years ending 1880, 37 per cent, of the villages were, on the
average, damaged, in many cases seriously, by natural disasters not
capable of prevention, such as frost, drought, floods and wet, plant
diseases, vermin, etc.

88 AGRICULTURAL INDEBTEDNESS

Cattle, again, are very generally bought on credit, and
one of the most devouring forms of usury is that of
cattle-merchants and of those who lease out cattle to
the farmer for breeding and fattening ; the trade in
cattle and the bail a chcptel are said to be more pro-
ductive of usury than money-dealing itself.

1 The heavy indebtedness of proprietors in Europe
is not due, to any great extent, to improvements and
developments ; it is of long standing, and originated
long before the modern development of farming, which,
indeed, has hardly reached the peasant farmer — e.g., in
France the mortgage debt in 1840 was £480,000,000;
in Germany and elsewhere it was similarly very heavy,
Dr. Mascher's estimate for Prussia alone in 1869 being
above £337,000,000 and below £375,000,000, while in
1894 it is calculated at £500,000,000.'

The indebtedness of the small farmer has been for a
long while a subject of grave anxiety in all countries in
Europe. In recent years, owing to the spread of mutual
credit banks and co-operative associations among the
peasants, the outlook in agricultural districts has
brightened, and the tendency is no longer towards
deeper indebtedness, but towards freedom from the
oppression of the usurer and the land-bank. But this
movement is of very recent growth indeed ; in hardly
any country in Europe had it achieved important
results ten years ago, and it can hardly be said to
have begun in England yet. In order properly to
appreciate the value of the remedies now being em-
ployed for the reduction of agricultural indebtedness
it is necessary to understand the condition in which
the small farmers of Europe were placed ten years
ago. The following extracts from Sir F. A. Nichol-
son's Report give a few details about the condition of
different European countries before the agricultural
revival had developed :

'In France the total mortgage debt, wholly irre-
spective of all debts based upon personal and chattel

FRENCH AGRICULTURAL INDEBTEDNESS 89

credit, purchases upon credit of cattle, stock and
farm necessaries, or for family maintenance, etc., is
known to be about £660,000,000 — viz., 14 J milliards,
plus the mortgage loans (2 milliards) of the Credit
Foncier. The above estimate is made by most careful
economists and financiers, after allowing no less than
£180,000,000 (4! milliards) for mortgages discharged
but not struck off the registration records, from which
the gross total of 21 milliards (£840,000,000) is derived.
It includes, however, all urban mortgages, and not
rural only. In the department of the Garonne, a
vine-growing tract, for which particulars are given
in an American Consular Report, the annual mort-
gages were stated at 4"68 per cent, of the total value
of the land ; as mortgages are only given to one-half
the estimated value, it follows that each year about
9 per cent, of the land is mortgaged, while since the
mortgages are usually for a considerable term, it
follows that the bulk of the land is under mortgage.
As a matter of fact, actually existing mortgages amount
in that department to about one-third the estimated
full value, and therefore to about two-thirds of the
mortgage value of the land.

' For Austria no complete data are available, but
in only a portion of Austria — a comparatively poor
country with only 160 persons to the square mile —
the mortgage debts in 1888 were £160,000,000 on
peasants' holdings only, and the increase between
1867-88 was 42 per cent. Of these debts the
" number of cases due to the issue of warrants of
execution" was 1576 per cent, in 1868 and 31 per
cent, in 1888, while the value of such cases was 4*34
in 1868 and 7*23 in 1888, showing a large increase in
the court-sales of small properties. About one-fifth
of the cases and one-fourth of the amount of the debts
were due to the purchase and inheritance of land, even
in this sparsely-inhabited country.

1 For Germany statistics are not available, but the

90 AGRICULTURAL INDEBTEDNESS

burden is considered to be heavier relatively to value
than even in France. In Prussia the debt of all the
large estates together is put down at twenty-eight
times the land-tax, and that of medium estates at
eighteen times ; for small estates the figures are not
given. These are merely the registered mortgage
debts, which in Prussia only, on landed property
alone, were in 1894 placed at about £500,000,000,
and actually increased by £45,000,000 in the seven
years ending 1893. The increase is put down to bad
harvests and other losses, and the law of inherit-
ance. In Prussia in 1886-87 the mortgages newly
registered in that year alone were £31,200,000, while
those paid off were £24,440,000. This gives at once
an idea of the amount and of the rate of increase of
mortgage debt (Mayet), it being remembered that in
Europe most mortgages are of long term, those given
by the Land Mortgage Banks being of thirty, forty, or
more years.

' In Sweden the indebtedness of peasant proprietors
"has increased considerably within the last twenty
years," and also, but in a less degree, during the pre-
ceding twenty years. The increase is put down to
the necessity for intensive cultivation and to the
increase in facilities for borrowing, and to the law of
equal inheritance, necessitating mortgages for paying
off shares.

'In 1893 a discussion in the Storthing (House of
Representatives) of Norway gave a most instructive
account of Norwegian peasant indebtedness. The
mover of the debate, representing the richest agri-
cultural district in Norway, declared that the land-
owners were falling deeper and deeper into debt ;
that their mortgage debts had risen from £9,000,000
in 1865 to £27,800,000 in 1893, exclusive of similar
debts to savings-banks and merchants, while the
landed property was worth (according to a correction
by the Home Minister) about £44,000,000; hence that

INDEBTEDNESS IN NORWAY 91

the proprietors only had an interest of about two-
elevenths in the total value of the soil ; that the bare
interest on the debt, even at only 4 per cent., was
equal to one-sixth of the value of the gross agri-
cultural produce, so that the farmers, especially with
falling prices and increasing taxes, were in a desperate
position. The causes of debt appeared to be the fall
in prices, the rise in taxation, the want of practical
agricultural teaching, the right or the necessity of the
eldest son to buy out all coheirs on succession, and
the " exigencies of more civilized life," apparently a
euphemism. Practically the whole of the above debt
was held by the Bank of Norway, the Land Mortgage
Bank, and the savings-banks — a striking commentary
on the idea that banking credit will cure indebtedness.
While the Minister of the Home Department con-
sidered the statistics " somewhat exaggerated," they
were not seriously combated or denied, and there was
" a unanimous agreement as to the present im-
poverished condition of the peasant proprietors of
Norway'" (Foreign Office, No. 282 of 1893).

'In Switzerland "the indebtedness of the peasant
proprietors has increased to a very large extent
during the last twenty years," due partly to a great
rise in land values, giving the opportunity of making-
fresh charges (mortgages) on the land, partly to the
laws of inheritance. It is extremely important to note
the former reason, since it shows that, even in countries
of good education, the peasant cannot refrain from
pledging any additional value which the land may
acquire. In Berne " the indebtedness of the peasant
proprietor has been steadily increasing for the last
thirty years ; the sales of their holdings have been
becoming more frequent, and there has been a grow-
ing tendency among the agricultural population to
migrate to towns or to emigrate beyond the seas."
The increase of debt in this canton is enormous. The
capital value of the land in 1889 was £40,73 5,084, and

92 AGRICULTURAL INDEBTEDNESS

the debts thereon £15,952,492, or 39 per cent. The
value of the land increased from 1856 by 65 per cent.,
and the debts by 128 per cent. In one division of the
canton the debts were 55 per cent, of the capital value
— that is, practically the whole area was pledged to
nearly its full mortgage value, since two-thirds of the
estimated value is generally the mortgage value.

' For Italy the figures are very heavy. On January 1,
1888, the registered mortgage debt bearing interest was
above £328,000,000, in addition to registered charges
("hypotheques legales ") of above £71,000,000. These
latter are claims upon property not susceptible of
interest, such as dues for construction, supply of
material, etc. The interest on mortgages proper is
very heavy. " It has been contracted under peculiarly
onerous conditions, and so heavily burdens the soil
as to form one of the chief evils from which agriculture
suffers " (M. Claudio Jannet). " Often the interest on a
loan representing only half the value of the land
absorbs the profit of the whole " (" Inchiesta Agraria"
s.v. " Venetia"). The pages of Mr. Beauclerk (" Rural
Italy ") are full of the accounts of rural usury and in-
debtedness ; so also M. E. de Laveleye in " Letters
from Italy," and numerous others.

' In Denmark the indebtedness has steadily increased
for the last forty years, the increase being chiefly due
to the " cost of purchase and the laws of inheritance."
Indebtedness to the amount of 40 per cent, of the
capital value is called normal, but it is now about
50 per cent. This is the value relative to the capital
value, but the absolute amount is said to have in-
creased six- or seven-fold in the last forty years ;
hence, as in Switzerland, a greatly increased value
of the land has been followed by a still greater
burdening of that value. The similarity in the pro-
portion— viz., 40 per cent. — is also noteworthy. Now,
since money-lenders and banks in Europe seldom
advance money to more than half of the estimated

INDEBTEDNESS IN EUROPE GENERALLY 93

value of the land, it follows that nearly the whole
land is under mortgage when the mortgage amount
is 40 or 50 per cent, of the value. This is a significant
fact.

' In Belgium the peasants are said to have grown
poorer, the exceptions being those who are temperate,
active, and thrifty to an unusual degree. The figures
are not, however, available.

' It is to be remembered, per contra, that in certain
cases this increase of indebtedness is due to better
cultivation and to a pledging of the land for improve-
ments and for the mobilization of the capital sunk in
the soil ; it is not always an unproductive charge.
Also, that whereas the loans in former years were at
usurious, or at least heavy, interest, the loans, at least
in Switzerland, are now often at lower interest, and
are not therefore necessarily in all cases a heavier
annual burden. Moreover, while all mortgages are
registered, releases from mortgage are not necessarily
registered, while partial repayments are necessarily
not shown. This, although allowed for in the French
statistics, somewhat reduces the total burden. Again,
in Switzerland and in Prussia it is the rule that the
State land-tax is reduced in proportion to the burdens
(mortgages) that the land has to bear ; hence it is not
uncommon deliberately to keep an estate burdened in
order to escape the tax, the proceeds of the mortgage
being placed out at interest.

' But for Europe in general it is certain that mort-
gage indebtedness has immensely increased during
the last twenty to forty years ; that besides mortgage
debts there is a great mass of charges in the form of
" hypotheques legales et occultes " — i.e., charges not
bearing interest, and arising from claims of various
sorts, and also unregistered debts ; that there is a
great amount of unknown and personal debt ; that the
debts are largely due to the fall in prices, to the law of
inheritance, to heavy succession duties, to great losses

94 AGRICULTURAL INDEBTEDNESS

in the matter of crops, vineyards, cattle, etc., and to
the peasant "obtaining possession of his holding at too
great a cost, and exhausting the greater part of his
credit in the process. He has thus to commence farm-
ing without a sufficient working capital, and with no
reserve fund on which to fall back in bad years." It is
only in exceptional cases that holdings purchased and
worked on credit can clear off their indebtedness by
what they produce. In exceptional places the peasant
proprietor may hold his own without difficulty, but
" when his resources are limited to the uncertain pro-
duce of a small holding, his position, at best a pre-
carious one, must become untenable when exposed to
the stress of bad times." He must then part with his
land and emigrate either to the town or to other
countries. These latter remarks are quoted from
Switzerland, but equally apply to Europe generally,
and go far to explain the enormous emigration from
Germany, Italy, etc.*

' The above is taken largely from Parliamentary
Paper, Commercial, No. 5, of 1891, a paper drawn up
from reports from the British Embassies in Europe,
which, again, are based chiefly upon local official
information, and are sometimes mere translations of
official communications from the respective European
Governments. Hence they have the stamp of authority.

' A body of reports on the trade and credit systems
of Europe, drawn up by the American Consuls, state
similarly that mortgages are general and very heavy
upon landed property — e.g., in the Silesian province of
Prussia, where the first land-bank was started in 1769,

* In reading these extracts it must be remembered that Sir F. A
Nicholson's report (vol. i.) was completed in 1895, and that these
reflections upon the indebtedness of the European peasantry were
penned before the modern agricultural revival had made itself felt.
In the next chapter will be found an account of the system by
which the European peasant has been taught thrift, co-operation,
and self-help, and by which he is gradually being liberated from
bondage to the usurer and the land-bank.

DEBTS FOR 'LAND IMPROVEMENTS' 95

it is said that " at least seven-eighths of all farms, large
and small, are mortgaged to a greater or less extent."
In Denmark " the greatest part of the landed property
is mortgaged to an extent varying from one-third to
two-thirds of its estimated value"; for Switzerland, par-
ticularly, it is stated that credit is abused by reason of
the facility with which it is obtainable. Precisely the
same evidence is afforded by the various authorities
who have written on the subject of agricultural credit.
In few of them, unfortunately, does agricultural im-
provement find any place as a cause of indebtedness,
except in so far as the pressure of population and
foreign competition are forcing intensive cultivation,
and, by consequence, the purchase of manures,
machinery, etc. The European peasant is, as ad-
mitted even by his admirers and advocates, the most
bigoted of conservatives ; " routine " and his father's
customs guide him, as they do the Indian peasant, and
it is a grave error to suppose that he, any more than
his Indian confrere, is thirsting after credit with a
view to "land improvements." The matter is of grave
importance, for if credit institutions are started in
India in its present condition merely to grant cheap
credit, with the idea that the ryot is sighing for capital
in order to sink it in wells, and permanent improve-
ments, and higher cultivation, and decent cattle-sheds
and homesteads, the error will lead simply to further
unprofitable indebtedness. Even the European im-
provement in agriculture of late years is due much
more to the teaching and example of the powerful
agricultural departments of the State and to the
admirable agricultural associations than to facilities
for credit. By the example and instruction of the one
and by the co-operative efforts of the other the peasant
is learning to appreciate, and is now beginning to buy,
new implements, better seed, manure, and so forth.
What the European peasant, left to himself, requires
in credit is the means of buying land at any price, of

96 AGRICULTURAL INDEBTEDNESS

paying off usurious debts, of finding cheap capital to
pay off his coheirs, of combating, by cheaper capital,
the terrible fall in the prices of produce and the con-
tinuous rise of expenses, rather than capital to be
sunk in permanent improvements or invested in the
higher agriculture.

' No statistics and little information are obtainable
regarding the debts under personal and chattel credit.
These must be enormous, since the "Jews" of Europe
play to the full the part of the Indian money-lender in
making advances on crops and on general status, in
selling to the peasants cattle and goods at credit prices,
while the poor, as everywhere, purchase all neces-
saries upon credit at very high rates. Further notice
of this matter will be found below, in considering the
action of the money-lender upon indebtedness.

'To resume, the landed proprietors and tenants of
Europe are deeply mortgaged, especially the small
folk, who, moreover, have large debts on personal
credit which are not easily calculable.

' These debts have increased in a greater degree than
the value of the property, which, on the other hand, is
far above that of fifty years ago. The causes of these
debts which have long existed, though not in the same
proportion and to nothing like the same amount, are —
(i) the purchase of land on credit; (2) the operation of
the laws of inheritance, by which a property is either
split up amongst the heirs, or, as is usual in the case
of small proprietors, taken by one heir, who pays his
coheirs the value of their shares, raising the sum by
a mortgage on the estate ; (3) great losses by season
and disease ; (4) a lowering of prices due to foreign
competition in produce ; (5) the weight of taxes, suc-
cession duties, previous debt, etc. ; (6) the action of
money-lenders ; (7) facility of borrowing ; (8) the
necessity — due to the increasing pressure of popula-
tion— for intensive agriculture, with its attendant need
for a larger working capital ; and (9) the social and

INDEBTEDNESS IN EUROPE AND INDIA 97

individual defects of the people — e.g., in the matters of
education, temperance, thrift, foresight.

1 Of the causes of indebtedness mentioned above,
only those of the actions of money-lenders and of the
facility of borrowing need further discussion for the
purpose of this study. The first it is useful to discuss
to show that the small proprietor everywhere, in his
universal need for capital, is the prey of the money-
lender, and that, while human nature is as it is, the
money-lender cannot, if he wishes it, avoid en-
tangling the peasant. The danger and the difficulty
of the ryot in India is not singular ; it is common to
the small holder all over the world, and it is necessary
to recognise this in analyzing Indian conditions and
miseries, and in planning out remedies. We have in
India no abnormal and unheard-of misfortunes and
conditions, but exactly the same difficulties, generally
in a far less intense degree, as in Europe, and even
in America. If, however, we have the example of
the European peasant's difficulties, we have also the
history of the efforts made to help him, and in
these, whether in success or failure, lies the lessor
for us in India. The succeeding remarks are drawn
direct from standard or- authoritative European
works or reports on rural economy, credit, and
statistics.

' In France the great mass of the agricultural mort-
gage debt is held by private lenders, and probably the
whole of the personal credit rural debt. Now, the
money-lenders are said to be frequently mere usurers.
" Very often the3' avail themselves of the misfortune of
the borrower; they trade upon his misery and igno-
rance. From the moral point of view their actions are
criminal ; they are frequently the ruin of the agricul-
turist."

'The details of the transactions are well known.
Beginning with a simple note or bond, all the tricks of
the trade are habitually and purposely resorted to,

7

98 AGRICULTURAL INDEBTEDNESS

until the patrimony of the peasant is in the usurer's
hands. In good seasons, when the debt might be paid
off, the debt is not pressed for payment, but rather
avoided ; in bad seasons, or on inconvenient occa-
sions, the money-lender suddenly requires his money,
till the wretched peasant signs away his whole
property."

'The pages of M. Durand in " Le Credit Agricole,"
may usefully be studied in this matter, and in an
admirable article on " Le Credit Agricole en 1893" {Le
Correspondent^ June, 1893), he says : " L'usure dans les
compagnes francaises est infiniment plus repandue
qu'on ne le suppose" (Usury in the country districts
of France is infinitely more common than is generally
supposed). His own original impression was other-
wise, but " en cherchant bien, en nous informant soig-
neusement, nous avons fini par apprendre que les
meilleurs de nos fermiers, et les plus riches cultiva-
teurs de notre commune, empruntaient chaque annee
des sommes plus ou moins importantes au taux de 10
pour 100 " (After careful inquiry we have learnt that
the best of our farmers and the richest cultivators of
our neighbourhood borrow every year sums of more
or less importance at the rate of 10 per cent.). If the
richer classes of farmer are compelled every year to
borrow at 10 per cent., what must be the rates ordi-
narily paid by the small folk, to say nothing of bad
years and unfortunate folk ?

1 As for usury in cattle, it is equally common and
wasteful to the ryot, and one great object of the new
agricultural associations is to enable a peasant to buy
good cattle on decent terms, instead of any sort of
cattle at prices 50 per cent, above their value. It is
common for a man to pay 700 francs for a pair of
cattle which would cost only 500 for cash. "Too
often," says one authority, " the peasant works not for
himself, but solely for the profit of the usurer who has
made him an advance ; his cattle are bred and fattened,

RAPACITY OF THE USURER IN GERMANY 99

not for himself, but for his creditor, so that the French
peasant's motto might be Virgil's, ' Sic vos non vobis
fertis aratra boves.' "

' In Germany the picture is even more detailed and
pitiful. For want of credit institutions over the greater
part of the country, usury is almost universal, and
" from its pitiless exploitation of the smaller agricul-
turists, it is considered as a menacing social danger."
The peasant is "unable to take count of his pecuniary
situation "; he keeps no books, and cannot judge of the
pecuniary result of a transaction, whether of a venture
in cultivation or of a loan from a money-lender. The
result is that the rural classes " fall into the clutches of
men who, under colour of helping them, desire nothing
save their ruin for the profit of the lender himself."
These are represented as lying in wait for misfortune,
and are as eager as vultures when there is a chance of
prey. The story of their action, whether in loans of
money, cattle, or goods, is everywhere the same, and
similar to that of France : temptations, false accounts,
the law-courts, miserable cattle and bad goods at
maximum prices — all these are general. It was the
terrible misery of the peasants as regards usury, and
the " frightful and shameless " action of the usurers,
that led Schulze Delitzsch and Raiffeisen to the idea
of popular banks or credit unions, the latter, in fact,
regarding the usury question as the most important
of the then social problems. The latter, in his first
burgomastership, found his charge (Flammersfeld) a
scene of poverty and usury. The " cultivators " seldom
had cattle of their own, but borrowed them from
dealers whose terms they were forced to accept on
penalty of losing their cattle, and the dealer was thus
able to extort " the whole value of the worth of the
cattle, while the misery of the peasant increased yet
more and more." Elsewhere the money-lender was so
powerful that the produce was often handed over bodily
to him on his own terms ; he then — again on his own

7—2

ioo AGRICULTURAL INDEBTEDNESS

terms — supplied food and seed, often of bad quality.
A year of excessive rain or drought is the money-
lender's opportunity, and very pitiful tales reached the
writer of this study of the action of the "Jews" in parts
of Wurtemberg in the drought of 1893. The societies
of social economy and of agriculture, the State Assem-
bly, the public journals and individual statesmen,
lawyers and economists, have made special inquiries
and studies of this subject, which is described and
discussed in much detail in a recent Congress of the
Society for Social Economy (1888 — " Verin fur social
Politik "), and in a debate in the German Parliament of
the same year. In fact, in 1880 Germany enacted a
most severe law against usury, and Austria has fol-
lowed that example in 1881 — a fact which in these
days is remarkable and significant, seeing that the law
was passed upon careful inquiries and reports. This
law provides that judges shall examine all cases where
usurious interest or transactions are brought to their
notice, and shall determine upon a consideration of
the facts and circumstances in each case whether
usury has been practised, their judgment carrying
with it a fine and imprisonment. This law has been
amended by a law of July, 1887.

' In Italy usury is still more rife, and the accounts
given by Italians, English and French economists and
observers, by the great report of the Agricultural
Commission, and by numerous writers, are very har-
rowing. The pages of De Laveleye and Beauclerk
are open to the English reader. In French and Italian
writers most extraordinary usury is mentioned in
detail. Five per cent, per month for usury is common.
In one village where M. Wollemborg established a
credit institution interest varied from 20 to 200 per
cent. ; in another the little bank started by the same
philanthropist successfully lent money at 6 per cent,
to pay off debts with the usurers on which 30 to 100
per cent, was being paid, the successful action of the

USURY IN ITALY 101

bank showing that the peasants were paying usury
and not interest. Signor Levi mentions rural usury
up to 730 per cent. — i.e., 2 per cent, per diem. Maize
for food to the cash value of twelve francs was in one
village supplied to the wretched peasant by the usurer
on consideration of his paying twenty-four francs in
three months, or at the rate of 800 per cent., and the
maize was often of bad quality, such as causes the
Italian scourge known as the " pellagra." In this village
the Mayor alleged that the peasants " often had to pay
the fabulous interest of 1,200 per cent." Small wonder
that, as it is said, a man who has 2,000 lire (£80) of
ready-money and a hard heart can live on its pro-
ceeds. In fact, in Italy generally the peasant popula-
tion and small farmers are the prey " of the most
frightful and shameless usury," to the cash terms of
which gratuitous labour (corvee) and a dinner on Sun-
days, presents of fruit and vegetables, and other
services, are not infrequent, though unexpressed,
additions.

'As it is not intended to describe the condition of
Europe except in so far as to draw lessons for India,
it is needless to go further in this description,
which might, however, for the countries mentioned
be indefinitely extended with the most precise
details. Is it likely, however, that the Indian money-
lender and peasant farmer are on very different
terms ?

' Now, on this point there are two opinions, one of
which regards the money-lender as, on the whole,
rather beneficent and kindly, a sort of partner with
the ryot, supplying the needs of the latter, and
maintaining him in times of misfortune. Others,
again, regard him rather as a beast of prey, seek-
ing everywhere whom he may devour. The truth,
as usual, probably lies near the middle. As society
and credit are at present constituted, he fills an abso-
lute gap, and is a rural necessity; on the other hand,

102 AGRICULTURAL INDEBTEDNESS

he is most undoubtedly an expensive and dangerous
necessity. He has been found in India from time
immemorial, and Munro and Mountstuart Elphinstone
in Bombay give pictures of the rapacious and en-
slaving action of the usurer, the misery and bondage
of the ryot at the beginning of the century, precisely
similar to those of Europe and Southern India at the
present day, except that land mortgage was then
unusual, since land had little or no value.' So, too,
Holt Mackenzie, in 1832, when giving evidence before
the Select Committee on the affairs of the East India
Company, declared ' that the borrowing of money by
cultivators of the land was practised very extensively ;
he might almost say it was universal, and he thought
that probably three-quarters or seven-eighths were
cultivating with capital borrowed in that way.' Holt
Mackenzie's experience of India had begun in 1808,
and therefore he may be assumed to have been de-
scribing the conditions of things that prevailed when
British rule began in this part of India. He went on
to say ' that he supposed three-fourths (of the culti-
vators) were cultivating the soil with capital borrowed
at the rate of 2 per cent, a month. The length of
time during which the advance continued depended a
good deal on the crop. In sugar-cane the advance
probably ran on for a year ; the grain crops, being
produced more rapidly, the cultivators must generally
possess the means of repayment in about half a year;
but a great majority in Bengal seemed to live from
hand to mouth, and to be always in debt. The cul-
tivators did not use the money-lenders as commission
merchants, but it was very generally a part of the
bargain that the produce should be delivered to the
money-lenders. The bargain generally was to deliver
at a certain price, which was always below the market
rate. He had known an instance in which, when
the market rate of sugar was 15, the deliveries
of the cultivator were at 20, and they generally

USURY IN INDIA 103

delivered all their produce at a price below the
market figure.*

Much of the above remains true at the present day.
That most competent observer Mr. William Crooke
estimated in 1888 that in the Etah district 44 per cent,
of the families in a selected area ' habitually pro-
vided their own seed-grain ; the remaining 56 per cent,
borrowed it. Nor is this result abnormal or indicative
of any degree of poverty peculiar to this district.
Inquiries made at Agra showed that 78 per cent, of the
tenantry were in debt. Mr. Moens, in Bareli, found
that ' 66 per cent, of the tenants about whom he made
inquiries borrowed their seed-grain.' Similarly Mr. E.
Rose wrote from Ghazipur, 'as a rule, a very large
proportion of the agriculturists in a village are in debt.
Sometimes the debt is one which has descended from
father to son, sometimes it is one which has recently
been contracted for a marriage ceremony or a lawsuit,
but almost always, as far as the debtor is concerned,
an indeterminate quantity ; he has seldom an account
of it, and only knows what he paid off at the last
harvest, or when the last payment was made. Great
numbers of the agriculturist community appear to
have a kind of running account with the mahajan
(banker) ; he advances them seed, giving one seer less
than the market price, an investment of which, barring
the accident of drought and a deficient outturn, when,
in kindness and compassion, the village Shylock would
let the debt run on to a more convenient time, it may
fairly be said, ' This is the way to thrive, and he is
blest, and thrift is blessing, if men steal it not.' In
other instances the advance is made at seed-time on
the Sawai principle, which means a return at harvest
of one-fourth more than the quantity borrowed at
seed-time. He lends money, moreover, as I have

* ' Minutes of Evidence taken before the Select Committee on
the Affairs of the East India Company ' — II., Finance and Accounts :
Trade, p. 17, 1832.

104 AGRICULTURAL INDEBTEDNESS

already said, for the inevitable marriage and the
equally inevitable lawsuit. When the tenant falls on
evil days, he will advance him rent to save him from
ejectment ; he is, in fact, at all times the resource to
which the needy agriculturist goes for relief, and the
consequence is that a large proportion of the cultivating
community is seldom free from the mahajaris influ-
ence. When the crops are reaped, the greater portion
finds its way to his granary ; the tenant retains a share
for his immediate use, but seldom for the consumption
of his household and for the following seed-time.
Long before next harvest approaches he has, as a rule,
to have recourse to the m-ahajan, upon whom, in no
inconsiderable number of instances, he is at certain
seasons of the year — more especially before the ap-
proach of each harvest — almost entirely dependent for
his daily supply of food. But the system is not with-
out its advantages in ' hard times'; it is to the interest
of the creditor, as well as the debtor, that the latter
should live ; there is a community of interest which
secures him from starvation.*

Although statistics do not exist for India which
would enable us to compare the rural indebtedness of
this country with that of Europe, it is clear that there
is no very striking difference in this respect between
the East and the West. Such rough estimates as we
have for India are of the percentage of cultivators in
debt, whereas the European figures have reference to
the extent of land upon which debts have been raised ;
but the results obtained by either of these methods of
calculation are sufficiently similar to justify us in con-
cluding that there is no striking disparity between
India and Europe. As far as the figures can be held
to prove anything, they show that the advantage is at
present slightly on the side of the Indian agriculturists.

* ' An Inquiry into the Economic Condition of the Agricultural
and Labouring Classes in the North-West Provinces and Oudh,' 1888,
P- 133-

INCREASE OF INDEBTEDNESS 105

According to the three estimates mentioned by Mr.
Crooke, from 56 or 66 to 78 per cent, of the cultivators
are in debt. We may, perhaps, assume that the average
is about two-thirds of the whole body. In Europe
the normal indebtedness is estimated to extend over
80 per cent, of the peasants' land, and before the recent
agricultural revival it was asserted that the percentage
was being increased. We should probably not be far
wrong if we assumed that about three-quarters of the
peasant proprietors in certain European countries are
in debt.

That the indebtedness of the peasantry of Europe
increased considerably in the latter half of the nine-
teenth century is admitted on all sides, but we are not
in a position to say with certainty whether the in-
debtedness of the Indian cultivator is also increasing.
The evidence of Holt Mackenzie seems to indicate
that even at the beginning of the last century the
Indian cultivator pledged what credit he had to the
utmost. There is, however, a popular impression
which must be allowed some weight as evidence that
the peasantry of to-day are more deeply involved in
debt than their forefathers. In cases where the
peasantry are the owners of the land they till, as is
commonly the case in the Punjab, and to a more limited
extent in this province, it is intrinsically probable that
indebtedness should have increased. The value of
land and of all interests in land has risen enormously
since the beginning of the nineteenth century, and the
peasant of to-day has far better security to offer than
his father, and can consequently raise more money upon
it. Now, the experience of European countries proves
that any increase in the cultivator's power of borrow-
ing is certainly followed by an increase of his indebted-
ness ; he borrows everywhere, not according to his
need, but according to his capacity. Where the value
of land is very low, or where, as in some of the Indian
feudatory States, the cultivator may not alienate his

io6 AGRICULTURAL INDEBTEDNESS

interest in his holding, the peasant's credit is small.
He can raise money only against the expectation of
the next harvest, upon his cattle, and upon his wife's
jewellery or household utensils. His capacity for in-
debtedness is extremely limited, and he is not, there-
fore, very deeply involved. But the action of British
law-courts has been to invest the proprietor of land
with an asset, the value of which has been steadily
increasing, and against which the peasant proprietor
soon discovered that he could raise large sums of
money. It is extremely probable, therefore, that his
indebtedness has increased pari passu with the value
of his property.

The evidence that the indebtedness of the cultivator
is increasing may not be irrefutable, but it certainly
has the colour of strong probability. Unfortunately
there is not even as much evidence to show that the
rate of interest charged by the money-lender is going
down. A well-to-do man who is not already in the
grasp of the money-lender can negotiate a loan upon
good landed security at 8 per cent, to 12 per cent., but
the tenant who has nothing to pledge but his cattle or
the prospects of the next harvest has still to pay
usurious interest, 37^ per annum not being at all un-
common. This high rate of interest is all the more
pitiful because there are in India considerable savings
waiting investment for which their owners hardly
succeed in getting more interest than is commonly the
case in Europe. As long ago as 1891 the late Mr.
Justice Ranade said at Poona to the Industrial Con-
ference : ' No fact in the economic condition of this
country arrests attention more forcibly than the con-
trast presented by the hoards of unused capital, stored
up in the vaults of the Presidency and other exchange
banks, and the high premium Government securities
command on one side, and on the other the utter
paralysis of industry in rural India, due to the poverty
of the resources of the classes engaged in the produc-

LOANS TO THE AGRICULTURAL CLASS 107

tion of wealth. It would appear as if some impene-
trable barrier intercepted the overflow of wealth and
barred the channels of communication between the
reservoirs of capital and the parched fields of industry,
dried up for the want of wealth-bearing and fertilizing
moisture. . . . The Presidency Bank of Bombay
alone has at this moment more than fifty millions of
rupees of deposit receipts which it does not know how
to use, and which drives it in despair to refuse muni-
cipal and other private deposits except as current
accounts which bear no interest. Nearly twenty mil-
lions of rupees are locked up in the Post-Office Savings
Banks in the Presidency alone, and as many as fifty
millions of rupees are similarly locked up all over
India, which Government cannot turn to account
except by buying its own paper and maintaining from
the interest proceeds its Paper Currency Depart-
ment. . . . Meanwhile the cultivating and artisan
classes can get no loans except at rates of interest
ranging from 12 per cent, to 24 per cent.'

It seems natural to conclude that a reduction in the
current rate of interest on rural loans would immensely
benefit the Indian peasant, and this was avowedly the
object which the late Mr. Justice Ranade had in view.
Towards the end of his address he said : ' All that the
Government has to do is to organize district or city
committees of Indian capitalists, to empower them to
receive deposits at fixed rates, and lend them at slightly
higher rates to the borrowers on the security of lands
or houses, etc., the excess rate providing for a gradual
amortization of the debt in a definite period, as also
insurance charges and working expenses.'

Unfortunately the experience of Europe demon-
strates only too clearly that facile credit — i.e., loans
easily negotiated at a low rate of interest — are hardly
less baneful to an ignorant peasantry than the
dangerous advances of the usurer.

' Cheap and ready credit,' to quote again from Sir

1 08 AGRICULTURAL INDEBTEDNESS

F. A. Nicholson's report, 'without due safeguards in
the prudence of the peasant, is expressly mentioned in
the reports, etc., as a cause of indebtedness in Europe.
Debt has increased more rapidly than the value of the
land ; easy credit has meant reckless borrowing ; an
" unearned increment " due to a general rise of prices,
to a greater demand for land, etc., has usually been
discounted by the owner, whether large or small
proprietor.

' A few proofs will be given, those countries being
selected where the action of banks is particularly well
marked, amongst which will be specially noted Swit-
zerland, a country often quoted as an example both in
the organization of its credit, the industry, education,
and produce of its people, its methods of local govern-
ment, etc.

1 Switzerland, for about 3,000,000 of people, has about
900 banks of all sorts ; it may be said that there is a
bank for every village ; and the Federal Department
for the Interior expressly states that private " capital-
ists are no longer of any importance as lending agents,
the mortgage and savings banks being now (1891)
almost the only sources from which the landed pro-
prietor can borrow" (Commercial, 9, of 1891). The
result is that " borrowing has now been rendered easy
for him — too easy, indeed, perhaps, for the indebted-
ness of the land cannot go on increasing without
seriously endangering his position ; it is only in ex-
ceptional cases that holdings purchased and worked
on credit can clear off their indebtedness by what they
produce" (Commercial, 5, of 1891). "Credit is here
(Berne) carried on to such an extent that general pros-
perity is already injured thereby, and will probably
be still more injured in future "; the real estate " is so
heavily mortgaged that, in consequence of several years
of partial failure of the crops, the state of agriculture
is in a precarious position, the proceeds thereof being
scarcely sufficient to support the parties and enable

DANGER OF FACILE CREDIT 109

them to pay the interest on their debts." "Credit is
too frequently demanded and too easily granted " (St.
Gall), with the results of trade disturbances (Reports
of U.S.A. Consuls on the Credit and Trade Systems
of Europe, 1884).

' In Norway, where nearly the whole land mortgage
debt is held by banks, it is estimated that only from
one-sixteenth to one-fifth of the value of the lands
remains to the proprietors.

1 In Sweden, where peasants are notoriously thrifty,
the second of the three chief causes to which the great
increase of indebtedness is attributed is the increase
in the number of the country banks and the greater
facilities thereby afforded for borrowing.

' In Germany it has already been shown that the
landed debt is increasing at enormous rates, to a great
extent no doubt on urban property, but also largely
on farms. In Silesia, the original home of land banks,
the American Consul considers that at least seven-
eighths of all farms, large or small, are mortgaged to
a greater or less extent. The Consul at Dresden
(Saxony), the headquarters of a very successful land
bank, says that " it is rare to find a piece of property,
house or landed, free of mortgage." At Aix the Consul
says that a very large majority of the real estate is
burdened with mortgages, and judgments are in no
way conspicuous by their absence. In Bavaria, where
money is chiefly advanced by banks, " rural estates
are often much encumbered, and eventually sold by
auction." In Bavaria, with 681,521 farms, no less than
6,686 were subject to forced sale by courts in 1880.

' Here, then, may be seen the results, not of usury,
but of its equally dangerous opposite, facile credit.
Usury provided a moderate amount of capital at bur-
densome rates ; banking credit has substituted, in the
same countries, capital at cheap rates, but has increased
the mass of the burden. So far from banking, even
on the most honourable and careful lines — e.g., those

no AGRICULTURAL INDEBTEDNESS

of State banks, as in Norway, and savings-banks —
being found a panacea for rural indebtedness, it has
merely increased the gross burden ; the specific gravity
of the mass may be less, but the volume is more than
proportionately greater.

' What that burden is may be judged by the following
remarks : In Prussia the mortgage debt is £500,000,000
on 30,000,000 people, or nearly £17 per head , in Nor-
way it is £36,000,000 on 2,000,000 people, or £18 per
head ; in Switzerland, Canton Berne has a mortgage
debt of £16,000,000 on 538,000 people, or £29 per head;
this last country being, amongst countries of small
proprietors, more completely provided with banks
than any in the world, insomuch that the individual
money-lender is of no account.

' If such are the dangers and difficulties in Europe,
those of India can hardly be less. It is useless, how-
ever amiable, to believe that the ryot is only thirsting
for capital in order to invest it at once in the improve-
ment and development of his estate ; that the influx of
cheap capital is all that is wanted to enable him to
wipe off his old debts in order to start forthwith on a
self-denying career of productivity. It is dangerous to
confer, whether upon the peasant proprietor or upon
the Pariah labourer, a fancy character, born possibly
of hope or of an enlightened personal conception of
one's own probable or possible action under similar
circumstances, and forthwith to start for his aid insti-
tutions suited to such character, with the certain result
that he will do what more educated and enlightened
men did and do, whether in Germany in the early
days of land banks, or in Europe generally in these
days of competition and facile credit. Credit is a
remedy, but, like many remedies, it is also a dangerous
poison (a double-edged tool, a consuming as well as
a comforting fire, to use metaphors from European
writers), and in applying the novelty wholesale to the
Indian ryot it must be applied with the caution that

DANGER OF FACILE CREDIT m

such remedies require, lest the ryots learn too easily
to borrow with a light heart, the lighter that the terms
are favourable and repayment so easy and so gradual.
In what way does it benefit a peasant to owe £200 at
4 per cent, to a bank instead of £100 at 8 per cent, to
a money-lender unless it is absolutely certain that the
whole difference has been spent in the improvement
of the estate, a hypothesis absolutely in contradiction
with the European evidence, which shows that land
improvement banks are the latest in development and
the least in demand, and that the loans are for "family
purposes," for the repayment of previous debt, for the
purchase of land, the payment of taxes and the like.
What does it matter to a peasant whether he is ruined
by a bank or by a money-lender, by the too facile
credit of the one, or the too usurious terms of the
other ?'

CHAPTER VI

REMEDIES FOR AGRICULTURAL INDEBTEDNESS: THE
PEASANT AND THE MONEY-LENDER— Continued.

The indebtedness of the peasantry has long engaged
the serious attention of public men in Europe, and
various suggestions have been put forth from time to
time to solve this grave social problem. Two of these
deserve consideration here because they have com-
mended themselves to the Government of India, and
are actually being tried in this province.

The first of these remedial measures consists in
reducing the peasant's capacity to borrow. It has
been observed in Europe, as well as in India, that the
peasant's power to borrow depends chiefly upon his
being able to pledge his land as security for debt ; the
amount which he could raise upon the security of
his cattle or household utensils is trifling, for the
security is not very attractive ; but the value of land
has been steadily rising, and it is a security which
bank or money-lender will accept with gladness. A
cause, then, of the peasant's indebtedness is the
dangerous privilege which has been conferred upon
him of mortgaging his land — a privilege, it must be
remembered, which was suddenly conferred upon him
a comparatively short time ago. This is as true of
Europe as of India.

1 Take Prussia, for example. Before the well-known
legislation associated with the name of Von Stein the
peasants had no mortgageable interest in the land :

112

EVIL OF POWER TO MORTGAGE 113

they occupied but did not own it ; and the object of
that legislation was, in fact, the substitution of allodial
for feudal tenure. That was eventually accomplished
successfully, and the Prussian peasant became absolute
owner of his lands, while the noble held his lands free
of any peasant liens thereon. But the power of mort-
gage was granted from the beginning ; in fact, the
method adopted for freeing the peasant was that of
commuting his dues into a rent-charge or annuity,
which might be capitalized at eighteen or twenty
years' purchase, this amount being advanced by a
rent-charge bank which took a mortgage on the land
as its security. Add to this that the land banks of
Prussia established for nobles had, since 1770, set an
example of the mortgage habit, so that the German
peasant, hard pressed for working capital, for taxes,
and for maintenance, readily adopted the same, with
the result that Prussia, which at the beginning of the
century had but an infinitesimal mortgage debt, had
in 1893 a mortgage debt on " landed estates and peasant
holdings of about £500,000,000, the debt having " in-
creased by £45,000,000 since 1886" (Commercial, 3, of
1894); while the statement of objects and reasons to
a Bill of 1894 for the establishment of Chambers of
Agriculture states that one object of the new Chambers
is to assist Government in initiating legislation in-
tended to relieve the oppressive indebtedness of agri-
cultural land in the kingdom and to organize rural
credit. It is obvious, then, that while the abolition of
serfage and feudal dependence resulted in a free
peasantry, the ability to mortgage the land without
let or hindrance has resulted in the reimposition of
dependence in a much more objectionable form — viz.,
the dependence of the peasant on the Jew usurer —
with the further result that the great agrarian problem
now is not the liberation of the serf, but the freeing of
the freed peasant from the bondage of usury, to which
end statesmen, publicists, economists, and agricul-

ii4 AGRICULTURAL INDEBTEDNESS

turists are recommending protection, subsidies, land
banks, and other infallible panaceas.

1 In France the mortgage indebtedness is so great,
and the rate of interest so high, that the French
peasant can, in general, only live by a frugality and
parsimony, and by certain family restrictions which
do not usually commend themselves to general imita-
tion.

1 In the United States the statistics of the Census of
1890 show that in many, even of the largest States,
about half of the farms are mortgaged to their full
mortgage value — that is, one-half of their supposed
market value — and that the rate of interest is nearly
8 per cent.

1 It is, then, clear that free mortgage is not without its
dangers, and the example of Prussia is peculiarly
interesting for Indian students, for it is exactly
paralleled in this country, where, on a sudden, an
ignorant peasantry not only obtained absolute owner-
ship of the soil, subject only to State dues, but, equally
suddenly, found that land attained an enormous rela-
tive money value, owing to the fall in money, to foreign
trade, to the development of communications, and the
like. A great development of the mortgage habit at
once resulted, to be followed, as in Europe, by the
cry for State aid, for the establishment of land banks
and the like.

' It is easy to be wise after the event, and it is herein
that the study of European facts is so important to
Indian reformers and administrators, that it helps to
give that wisdom which may come from national object-
lessons. It teaches at least that the agrarian problem
is common to all countries, and that it is not to be
treated by any single panacea. What seems to be the
cause of the disease is often only a symptom, and no
radical cure can be effected by its removal. It may
disappear only to break out in unexpected form and
place. Abolish feudalism, or even the landlord, and

SUGGESTED REMEDIES 115

the money-lender appears ; establish equal rights, and
as a consequence equal inheritance, and the mortgage
becomes a necessity, or the estate a mere farmlet ;
reduce overwhelming State demands, and the result-
ing surplus is taken by the money-lender, or the small
proprietor becomes the petty landlord with a pauper
tenantry ; establish banks and facile credit, and in-
debtedness may be far more than doubled, or the
individual money-lender may be replaced by syndicates
of land-grabbers and dividend-hunters. The agrarian
problem, like the national, or, rather, the human
problem, is full of unknown or undervalued factors ;
it passes the wisdom of man to foresee and to provide
against the difficulties produced by ignorance, by want
of forethought, by imperfect legislative and adminis-
trative measures — nay, even by what seemed, and still
seem, measures of justice, civilization, and political
progress, such as equal inheritance, the abolition of
feudal services and inordinate State demands, the
introduction of cheap communications, etc., through
which the present agricultural crisis has arrived for
Europe, and is beginning in India. Hence it does not
necessarily follow that a limitation of the power to
transfer or mortgage lands is necessarily an error in
all conditions of society. Where a peasantry has
learnt the full lessons of thought and prudence, the
full use of credit and capital applied productively;
where the conditions of society and the demands of
the State are such as not to compel resort to the
money-lender, the power to mortgage to the full can
hardly be an error. In other conditions it is possible
that such power may only lead to undue indebtedness
and to a degradation of the agriculturist and his art.'*

Such reflections as these suggested one of the re-
medies which are now being tried in India for agri-
cultural indebtedness. As the peasant proprietor's
readiest way of raising money consists in mortgaging

* ' Report on Land and Agricultural Banks,' F. A. Nicholson.

8—2

n6 AGRICULTURAL INDEBTEDNESS

his farm, it is expedient to declare his holding inalien-
able, and thus make him incapable of pledging it as
security for a debt. This has actually been done in
the Panjab and in Bundelkhand. In the first case the
Government directly aimed at securing the manly
peasantry of the Panjab in the possession of their
ancestral fields. By the Land Alienation Act XIII. of
1900 a peasant in that Province cannot sell his land
to any but members of certain agricultural classes
who are recognised by statute as agriculturists. Even
more recently the Government of the United Provinces
passed similar legislation for the relief of the landed
proprietors in the Bundelkhand district. The Govern-
ment cleared the estates of debt and restored them to
the owners, coupled with a new provision limiting the
proprietor's right of alienation. The local govern-
ments were influenced by other than purely economic
considerations in passing these two Acts, and the
legislation will probably have fulfilled the object of
its originators if it succeeds in maintaining the peasant
proprietors of these tracts in the hereditary posses-
sion of their farms.

But these measures do not offer a complete and
final solution of the problem of agricultural indebted-
ness. An essential factor of that problem is that the
agriculturist, whether in India or Europe, must and
will have credit ; if he cannot have it cheap, he will
have it dear. At the same time the village money-
lender has hitherto made such a good thing out of
rural usury that he is not likely to abandon his calling
without reluctance. When borrower and lender are
so anxious to come together, it will be strange if they
do not manage to meet upon some terms or other, and
there is no reason whatever for supposing that those
terms will be more advantageous to the borrower than
before the passage of the Land Alienation Acts. It is
worth noticing that in France also special obstacles
have been placed in the way of the peasant seeking

MORTGAGING OF LAND PREVENTED 117

credit. ' The Code Napoleon attempted to safeguard
him from embarrassing himself by making his debts
recoverable only at common law in the ordinary civil
courts. This is, as elsewhere, a very lengthy, costly,
and somewhat uncertain proceeding, and the result
has been that the peasant has been not only safe-
guarded, but fettered. Loans are so difficult to recover
that the}'- are only granted on much higher interest
than similar loans to "commereants"; hence, as he was
bound to borrow, his debts are an unnecessarily heavy
burden. One of the most persistent agitations in
France is to obtain the modification of this law, so
that agriculturists may be placed on a common level
with commercial or artisan borrowers.'*

The complete solution of the problem of agricultural
indebtedness appears to lie in some system which will
provide the peasant with facilities for borrowing at a
low rate of interest, and at the same time devise safe-
guards against his inveterate tendency to borrow im-
prudently. Both of these conditions are satisfied by
the popular banks or co-operative credit associations
which have worked such a beneficial revolution in
Germany and some other countries of Europe, and
which therefore deserve the closest study by those
who would ameliorate the condition of the Indian
peasantry. But it is well to bear in mind that a system
of co-operative credit cannot be introduced by slap-
dash legislation, but only by the gradual elevation of
the people to a higher plane of thrift, prudence, and
self-restraint. The example of the popular banks of
Germany is valuable because it points out how this
education of the people can be practically taken in
hand, and does not condemn us to the sterile alter-
native of waiting for the slow influences of civilization
and progress to reach the masses.

The organization of co-operative credit in Germany
is due to the practical example and unwearied exer-

* F. A. Nicholson's Report, vol. i., p. 46.

1 18 AGRICULTURAL INDEBTEDNESS

tions of two men — Schulze Delitzsch and Raiffeisen —
who worked independently upon slightly different
lines, but upon practically identical principles. The
work of Schulze Delitzsch lay chiefly among the
artisans and small tradesmen of towns, and that of
Raiffeisen among the peasants of the rural districts.
It is the latter which throws the most suggestive light
upon Indian problems, and of which, therefore, a brief
account will be given here ; but the whole story of
these two philanthropists and their followers should
be read attentively in Sir F. Nicholson's luminous
report.

Raiffeisen was a man of slight estate, of very poor
health, with no particular property, but of unbounded
energy. He was forced by ill-health to retire from
public service in i860. Though sick and nearly blind,
he then devoted the remainder of his life to this work,
dying in 1888 after his societies formed an established
and successful system. 'He was the burgomaster of
a village — afterwards of a group of villages — in one of
the poorest parts of Germany — the Westerwald. It
had but a barren soil, scanty means of communication,
bleak surroundings, indifferent markets. Nature had
proved a very stepmother to this inhospitable bit of
territory, upon which the half-starved population —
ill-clad, ill-fed, ill-housed, ill-brought up — by hard
labour eked out barely enough to keep body and soul
together, with the support of the scanty produce of
their little patches of rye, buckwheat, or potatoes, and
the milk and flesh of some half-famished cattle, for the
most part ruinously pledged to the Jews. That refer-
ence indicates a peculiarly sore point in the rural
economy of Western and Southern Germany, which
led Raiffeisen to become an economic reformer. In
this country we have no idea of the pest of remorse-
less usury which has fastened like a vampire upon the
rural population of those parts. Even the gombeen-
man cannot compare with these hardened blood-

RAIFFEISEN 119

suckers. The poor peasantry have long lain helpless
in their grasp, suffering in mute despair the process
of gradual extinction. My inquiries into the system
of small holdings in those regions have brought me
into 'personal contact with many of the most repre-
sentative inhabitants — heads of agricultural depart-
ments, judges, parsons, peasants — and from one and
all, here, there and everywhere, have I heard the self-
same, ever-repeated, bitter complaint that the villages
are being sucked absolutely dry by the " Jews." Usury
laws, police regulations, warnings and monitions have
all been tried as a remedy, and tried in vain.' *

' It was this miserable district, where every little
wretched cottage and tumble-down house was mort-
gaged, and most of the peasants' cattle belonged to
the Jews, that was sorely visited by the famine of
1846-47, and it was the misery of the people that
moved Raiffeisen to action. Such were the conditions
of the country and of the people, and no more un-
promising field could have been selected. And the
conditions of the problem were no less difficult — viz.,
to supply within, confidence, courage, the spirit of
thrift, of self-help and of mutual help through asso-
ciation to a peasantry so enfeebled, suspicious and
dispirited, and to inspire without such confidence and
credit that, upon the guarantee of such a peasantry,
external capital should be attracted in sufficient
quantities to free the peasants from debt, and to
supply them with funds for maintenance and pro-
duction. This is the problem. Such are the conditions
which Raiffeisen had before him ; and in his solution
of it in its most unpromising form he has solved the
problem so successfully that the system is now
developing with immense rapidity, so that the end
of the next decade may easily see at least 5,000 rural
banks of this class in full operation. For India the
solution of the problem presents an absorbing interest,

* * People's Banks,' by H. W. Wolff.

120 AGRICULTURAL INDEBTEDNESS

for there are few, if any, parts more difficult to deal
with than the scene of Raiffeisen's first success, while
in this presidency (Madras) alone there are 10,000
villages far more suitable than Flammersfeld. But
the conditions of the country and of the peasantry do
not exhaust the factors of the problem ; there must be
imported into it, for its solution, the energy, skill, and
devotion of promoters of the Raiffeisen stamp. So
difficult is the problem that it has nowhere been solved,
save by such imported elements, and it is as well to
recognise this at the outset. Given a Schulze Delitzsch
or a Raiffeisen, and they will bring bread out of stones,
credit out of poverty, isolation and ignorance ; without
them or some similar influence the problem remains
insoluble.'*

In the associations which Raiffeisen founded ' the
principles of action are those of self-help, association,
solidarity, prudence, thrift, and public spirit. All
profits, less fixed interest on the very small shares —
introduced only in obedience to the law — go to a
common fund to be used for purposes of general
utility, and not for private gain.' Raiffeisen, like
Schulze Delitzsch, demanded no privileges for his
societies, but was content to base their success on
honest, energetic, and prudent action. In the words
of S. Wollemborg, who, in Italy, has founded similar
institutions, he believed that 'when a whole class, the
peasantry, is in danger, when the need is general and
abiding, no kind of mere assistance, whether from the
State or from individuals, is of any avail ; rather it
is mischievous, for it merely leads men to count
habitually on such succour — a succour which must
fail at last, and render more acute the consequent
distress, but it gradually stifles the feelings of self-
reliance and personal responsibility.'

The general feature of the Raiffeisen banks 'are:

* ' Report on Land and Agricultural Banks,' vol. i., p. 145,
Sir F. A. Nicholson.

RAIFFEISEN BANKS 121

(1) That the society is absolutely local, the limits of
a commune (village) being strictly maintained as the
limits of membership and operation; (2) that the ad-
ministration is equally local, members alone being
eligible for appointment, and is absolutely gratuitous ;
(3) that there is but small share capital, all funds being
borrowed on the guarantee of solidarity and eventually
of the reserve ; (4) that there are therefore no divi-
dends to pay, and all profits go to the reserve; (5) that
only members, who must be residents of the commune,
can get loans ; (6) that loans may be of long terms,
extending to ten or even twenty years ; (7) that, as far
as possible, all funds are the result of local thrift. A
Raiffeisen bank is simply a village society of agri-
culturists, labourers and shopkeepers, united for
common interests. At first a few of the better class
unite ; these by example and precept draw in others.
The first steps are hard, but once fairly started there
is little difficulty, as the advantages are manifest to
all. It is considered that the village should not have
less than 400, nor more than 2,000 inhabitants ; several
small villages may unite if too small for a separate
society. This principle of restricted area is deemed
essential ; the bank is thus at the borrower's doors.
It can be administered gratuitously and by the most
trusted men of the community ; it has a perfect kn )w-
ledge of the candidates, and can reject all unworthy
of the honour, who would be likely to discredit the
society ; it tends, therefore, directly by reason of the
advantages of membership, to encourage or to incite
men to industry, thrift and sobriety : as a priest of the
Rhenish provinces once said, " The bank has done
more for morality than all my sermons " ; it has a
perfect cognizance of the status and solvency of would-
be borrowers, and it can and does examine the purpose
of every loan and enforce its due employment, for in
a village all is open to the eyes and ears of all ; it
establishes among the members the bonds of con-

122 AGRICULTURAL INDEBTEDNESS

fraternity, and tends to substitute association for
suspicion, healthy and active communal yet per-
sonally free action for individual isolation and inertia ;
it forms a centre of local progress and reform. All
are admissible, even the poorest, who satisfy the
administration that they are worthy of membership,
and, as will be seen in Italy, the mere possibility of
joining a society has reclaimed men from drunkenness
and extravagance, and has given them an impetus to
sobriety, industry, and even to education in its ordinary
sense.'

One feature of the Raiffeisen bank which deserves
special attention is that the liability of the members is
unlimited ; every member may thus become personally
liable for the repayment of any loan imprudently con-
tracted or injudiciously employed. The first advan-
tage of unlimited liability is that it gives the maximum
of credit possible in the absence of material pledge,
and the second is that it directly instils caution and
prudence in the management of the affairs of the bank
on the part of all members.

The objects of a Raiffeisen Society are thus described
in Section 2 of the Model Articles :

'The object of the society is to improve the situa-
tion of its members both materially and moralty, to
take the necessary steps for the same, to obtain
through the common guarantee the necessary capital
for granting loans to members for the development
of their business and their household, and to bring
idle capital into productive use, for which purpose a
savings bank will be attached to the society.

'The society will have in view the following
objects :

1 1. The supply of raw materials (e.g., manures,
wool, coal, etc.).

'2. The sale in common of the products of agricul-
ture and industry.

' 3. Co-operative production and sale.

RAIFFEISEN BANKS 123

'4. The purchase wholesale of food -stuffs and
agricultural necessities and their retail sale to the
members.

1 5. The acquisition of implements or machines for
agriculture and industry, and their use in common.

' These objects cover a wide field, and if carried out,
would develop agriculture beyond belief. It is claimed
that these societies are actually developing in the
direction here indicated. It should be noticed that
in fulfilling the object of improving production, a
prime necessity was that of " freeing the members
from the grasp of the usurer," and one principal result
has been precisely this : the usurer has been ousted,
and the people set free to develop their farms or
industries. No previous liquidation was asked for or
needed. The member was a neighbour ; his character
was known ; the use to which he intended to put the
loan and his power of repaying it was examined ; the
money was advanced, and the thing was done.

1 All adults of either sex in full possession of their
civil rights may become members. A member may
withdraw or be dismissed. It may be noted that dis-
missal is necessitated by thel removal of the member
to a village outside the society's sphere of operations,
or if he joins another society of unlimited liability, in
which case, of course, the original society might lose
its lien over the member's property.

1 Members have the right of voting at the general
meetings if present in person; females have no right
to take part in such meetings, but may vote by proxy.
Every member is entitled to ask for a loan. They are
bound to answer in all their property for the debts of
the society, to pay up their shares, to obey the rules,
and to watch over the interests of the society in every
way.'

Since 1868, when the societies first began to develop,
they have multiplied with extreme rapidity. Statis-
tics, unfortunately, are incomplete, but they are said

i24 AGRICULTURAL INDEBTEDNESS

to be increasing at the rate of at least one or two per
diem.

1 There have been no actual bankruptcies during the
whole course of operations ; in the early days some
societies were wound up, but no case of bankruptcy
has occurred. There are, of course, small losses in
some of the societies, but in all cases they are covered
by the reserve, and in no case has any general contri-
bution been required from the members under the
principle of solidarity. This, at least, is the repeated
assertion of RaifFeisen and his followers.'

It would be easy to multiply glowing accounts of
the results achieved by the Raiffeisen societies. Two
extracts must suffice from Mr. H. W. Wolff's work
(1893), describing what he himself has seen.

1 You should go into the valley of the Rhine, where
Raiffeisen banks have been longest at work, and observe
to what extent homes have been made habitable and
comfortable ; how culture has been improved ; how
machinery has been purchased, and the best manures
and feeding-stuffs ; how the vintner has been enabled
to sell his produce for cash at double the old rate of
return ; how the small peasant can now buy his im-
plements and manures of the best quality at the
cheapest wholesale prices, and yet — thanks to a large
reserve accumulated in his bank, raised up seemingly
out of nothing, as if by fairy hands — at six months'
credit. You should see how small industry and trade
have been developed ; how the usurer, once all-power-
ful, has been driven out of the field, and those once
poor men have become small capitalists. One is afraid
of falling into a strain of rhapsody in describing all
these results.'
The other example is not less instructive :
' One very striking and characteristic instance comes
to me from the Grand Duchy of Saxe- Weimar. There,
in what not long ago was a forlorn district, something
like a rural Seven Dials, stands the forsaken village of

RESULTS OF CO-OPERATIVE CREDIT 125

Frankenheim. Poor, neglected it was, with tumble-
down houses, all of them heavily mortgaged, badly-
tilled fields, and an uncouth, barbarous-looking race
of inhabitants, rightly or wrongly reputed capable of
any misdeeds, and possessing some few famished
cattle, nine-tenths of which really belonged to the
"Jews." In pity the Grand Duchess had some model
dwellings set up, erected at comparatively consider-
able cost, but to let at a nominal rent of 30s. a year.
The success was not particularly encouraging. Some
time after the Lutheran vicar of the parish resolved
on trying the effects of a loan bank of the RaifTeisen
type. With the help of the money so secured — on
these poor people's own collective credit — he built
houses, each of which, with the ground upon which
it stands and the garden surrounding it, cost a little
under £60. For these houses the occupiers are re-
quired to pay 4! per cent, interest, plus one-fifteenth
or one-twentieth of the principal each year by way of
sinking fund ; therefore in all, according to circum-
stances, either £5 12s. or £6 12s., in consideration of
which the houses become their own after a certain
period. All these houses have been readily taken up ;
the tenants pay their rents regularly, and, thanks to
the money brought into the village, the whole face
of things has become changed. The dwellings have
become decent, the gardens well kept, the fields well
tilled, the "Jews" have been paid off, the cattle are
well fed, and the human inhabitants are known
throughout the country as orderly, well-conducted,
industrious, saving, and thriving folk.'

One cannot help looking wistfully for the introduc-
tion into these Provinces of co-operative credit institu-
tions which would have this educative effect upon the
people, and heal the sores which usury has engendered
in the rural economy. Government is practically
powerless in the matter, as the whole virtue of these
institutions consists in their being the effort of the

126 AGRICULTURAL INDEBTEDNESS

people themselves. Schulze Delitzsch and Raiffeisen
both rejected all forms of State aid from the conviction
that such assistance was injurious and not helpful.
What the country really needs is an Indian philan-
thropist who would work in his own neighbourhood
upon the same lines as Raiffeisen, a man who would
be ready, for the good of his people, to live a laborious
and yet humble life, who would not be daunted by
much coldness and indifference, and who would have
the ascendancy of character which compels the esteem
and the obedience of men. There are to-day many
Indians who are dedicating their lives to the work of
religion or of education : will not one or two be found
to devote themselves to the material well-being of
their fellows ?

The Government has taken the lead in this matter
to the limited extent of its power. In 1904 a Co-
operative Credit Act was passed to remove all legal
impediments that might hinder the creation of popular
banks and smooth the path of the Indian Raiffeisen, if
haply one shall be found. The Act, which aims
especially at pointing out the lines upon which the
people themselves should take action, is printed in the
Appendix.

The Raiffeisen banks have been examined in this
chapter because they suggest the most hopeful method
of dealing with the canker of rural life in India — the
chronic indebtedness of the peasantry. But the
organization of co-operative credit results in very
much more than the alleviation of a particular form of
distress. It is also the means of bringing into the
agricultural industry that capital of which it stands so
much in need. Left to himself, the peasant is more
apt to spend a loan in unproductive uses than in im-
proving his farm ; under the guidance of the bank, he
is more likely to use it as capital than in gratifying
his personal wants and desires. But, important as is
the application of capital to agriculture, this is not the

AGRICULTURAL CO-OPERATION 127

greatest service which the Raiffeisen bank renders to
rural society. Its greatest value lies in its educative
action. The co-operative credit bank is the germ from
which co-operation in all its varied forms most easily
and most often grows. Foresight and energy in the
people are the only solid foundations of all industrial
prosperity, and these virtues are not only stimulated,
but seem even to be created by banks of the Raiffeisen
type. From the modest beginnings of a bank which
frees them from the clutches of the usurer, the peasants
learn to associate to buy agricultural machinery,
manure, and seed at wholesale prices ; from co-opera-
tive buying they proceed to the conduct of co-operative
industries, and, having once started upon the path of
progress, they are ambitious of making still further
advance, and begin to educate themselves. When a
people have learned to trust in their own exertions,
and to be on the look-out for better methods of pro-
duction, their industrial future is assured. It is the
quickening and educating influence of co-operation
which has brought about the agricultural revival in
Europe in the last fifteen years ; and it is not sur-
prising to learn that since Belgium has been covered
with a network of co-operative agricultural associa-
tions, the average return from a farm of 10 hectares
(24! acres) has increased by £100 a year. As we find
in Europe usury as rapacious and indebtedness as
hopeless as are to be found in India, may we not hope
that co-operation, too, will have in India the same
quickening influence that it has had in Europe ?

APPENDIX TO CHAPTER VI

THE BUNDELKHAND ALIENATION OF
LAND ACT, 1903

(II. of 1903)

CONTENTS

Sections. Preliminary.

i. Short title, extent and commencement.

2. Definitions.

Permanent Alienation of Land.

3. Sanction of Collector required to certain permanent

alienation.

4. Agricultural tribes.

5. Saving for rights in land alienated.

Temporary A lienations of Land.

6. Forms of mortgage permitted in certain cases.

7. Rules applying to permitted mortgages.

8. Conditions in permitted mortgages.

9. Power to revise mortgage made in form not permitted

and mortgages by conditional sale.

10. Future mortgage by way of conditional sale not permitted.

11. Leases.

12. Restriction on power to make further temporary alienation.

13. Ejectment of mortgagee or lessee remaining in possession

after term.

128

LAND ALIENATION ACT 129

General Provisions.

14. Effect of permanent alienation made without sanction.

15. Sanction of Collector required to certain alienations of, or

charges on, produce of land.

16. Execution-sale of land forbidden.

17. Transfer to Collector of decrees on certain mortgages.

18. Record-of- rights and annual register.

19. Exercise of powers of Collector.

20. Application of certain provisions of the North-Western

Provinces Land Revenue Act, 1901.

21. Appearance of legal practitioners forbidden.

22. Jurisdiction of civil courts excluded.

23. Exemption.

24. Power to make rules.

ACT No. II. of 1903.

Passed by the Lieutenant-Governor, United Provinces of Agra and
Oudh, in Council.

(Received the assent of the Lieutenant-Governor of the United
Provinces of Agra and Oudh on May 2, 1903, and of the
Governor-General on May 29, 1903, and was published under
section 40 of the Indian Councils Act, 1861, on June 13, 1903.)

An Act to amend the Law relating to Agricultural
Land in Bundelkhand.

Whereas it is expedient to amend the law relating to agricul-
tural land in that part of the United Provinces known as
Bundelkhand, it is hereby enacted as follows :

Preliminary.

1. (1) This Act may be called the Bundelkhand Alienation Short title,
of Land Act, 1903. extent> and

(2) It extends to the districts of Banda, Hamirpur, Jhansi, me™™6"06"
and Jalaun, and to the Meja, Bara, and Karchana subdivisions

of the Allahabad district ; and

(3) It shall come into force on such day as the Local Govern-
ment may, by notification in the Gazette, direct.

2. In this Act, unless there is anything repugnant in the Definitions,
subject or context —

9

III. of 1901.

130 APPENDIX TO CHAPTER VI

N.-W. P. &0. (1) All expressions which are defined by section 4 of the
II. of 1901. North-Western Provinces Tenancy Act, 1901, or by section 4

TTT Ifr*?' of the North- Western Provinces and Oudh Land Revenue
Act, 1901, shall, subject to the provisions of this Act, have the
meanings assigned to them in the said sections respectively;
and the expressions ' record-of-rights ' and ' annual register '
shall have the meaning assigned to them, respectively, in
Chapter III. of the said last-mentioned Act.

(2) The expression ' land ' means land which is not occupied
as the site of any building in a town or village, and is occupied
or let for agricultural purposes or for purposes subservient to
agriculture or for pasture, and includes :

(a) The sites of buildings and other structures on such

land ;

(b) A share in the profits of a mahal or sir ;

(c) Any dues or any fixed percentage of the land revenue

payable by an inferior proprietor to a superior
proprietor ;

(d) A right to receive rent ; and

(e) Any right to water enjoyed by the owner or occupier

of land as such.

(3) The expression ' permanent alienation ' includes sales,
exchanges, gifts, and wills, but does not include any gift for a
religious or charitable purpose, whether made inter vivos or
by will.

(4) The expression ' usufructuary mortgage ' means a mort-
gage by which the mortgagor delivers proprietary possession
of the mortgaged land to the mortgagee, and authorizes him to
retain such possession until payment of the mortgage money,
and to receive the rents and profits of the land and to appro-
priate them in lieu of interest or in payment of the mortgage
money, or partly in lieu of interest and partly in payment of
the mortgage money.

(5) The expression • conditional sale ' includes any agree-
ment whereby in default of payment of the mortgage money
or interest at a certain time the land will be absolutely trans-
ferred to the mortgagee, and any agreement whereby the
mortgagor binds himself to repay the money on a certain date,
and transfers the mortgaged property absolutely to the mort-
gagee, but subject to a proviso that he will retransfer it to
the mortgagor upon the payment of the mortgage money as
agreed ; and

XVIII. of (6) The expression ' legal practitioner ' means any legal
l8?9- practitioner within the meaning of the Legal Practitioners
Act, 1879.

LAND ALIENATION ACT 131

Permanent Alienation of Land.

3. (1) A person who desires to make a permanent alienation Sanction of

of his land shall be at liberty to make such alienation Collector

where— re(*ux.red to

certain per-

(a) The alienor is not a member of an agricultural ^nation

tribe ; or

(b) The alienor and alienee are members of the same

agricultural tribe, or are members of agricultural
tribes and both residents of the district in which the
land is situated.

(2) Except in the cases provided for in subsection 1, a per-
manent alienation of land shall not take effect as such unless
and until sanction is given thereto by the Collector of the dis-
trict in which the land is situated :

Provided that sanction may be given after the act of aliena-
tion is otherwise completed.

(3) The Collector shall inquire into the circumstances of the
alienation, and shall have discretion to grant or refuse by an
order in writing the sanction required by subsection (2).

(4) Nothing in this section shall affect sales ordered or
permitted under the provisions of the Bundelkhand Encum-
bered Estates Act, 1903.

4. The Local Government shall, by notification in the Agricultural
Gazette, published with the previous sanction of the Governor- tribes.
General in Council, determine what bodies of persons in any

district or subdivision of a district are to be deemed to be
agricultural tribes for the purposes of this Act.

5. When a Collector sanctions a permanent alienation of Saving for
land, his order shall not be taken to decide or affect any ques- "ghts in land
tion of title, or any question relating to any reversionary right ahenated-

or right of pre-emption.

Temporary Alienations of Land.

6. If a member of an agricultural tribe mortgages his land Forms of
and the mortgagee is not a member of the same tribe, or the mortgage
mortgagor and mortgagee are not members of agricultural Certain cases
tribes and both residents of the district in which the land

is situated, the mortgage shall be made in one of the following
forms :

(a) In the form of a usufructuary mortgage, by which the
mortgagor delivers proprietary possession of the
land to the mortgagee, and authorizes him to retain
such possession and to receive the rents and profits

9—2

132

APPENDIX TO CHAPTER VI

Rules

applying to
permitted
mortgages.

of the land in lieu of interest and towards payment
of the principal, on condition that after the expiry
of the term agreed on, or (if no term is agreed
on, or if the term agreed on exceeds twenty years)
after the expiry of twenty years, the land shall be
redelivered to the mortgagor ; or

(b) In the form of a mortgage without possession, subject

to the condition that, if the mortgagor fails to pay
principal and interest according to his contract, the
mortgagee may apply to the Collector to place him
in possession for such term, not exceeding twenty
years, as the Collector may consider to be equitable,
the mortgage to be treated as a usufructuary mortgage
for the term of the mortgagee's possession, and for
such sum as may be due to the mortgagee on account
of the balance of principal due and of interest due
not exceeding the amount claimable as simple
interest at such rate and for such period as the
Collector thinks reasonable ; or

(c) In the form of a written usufructuary mortgage, by

which the mortgagor recognises the mortgagee as a
landholder and himself remains in cultivating occu-
pancy of the land as a tenant for such term as may
be agreed upon, subject to the condition that if the
mortgagor is ejected, or surrenders, or abandons
cultivating occupancy of the land, the mortgage
shall take effect as a usufructuary mortgage in form (a)
for such term not exceeding twenty years from the
date of the ejectment, surrender, or abandonment,
and for such sum of money as the Collector con-
siders reasonable ; or

(d) In any form which the Local Government may, by

general or special order, permit to be used.

7. In the case of mortgages made under section 6 —

(1) No interest shall accrue during the period for which
the mortgagee is in possession of the land, or in receipt
of rent ;

(2) If the mortgage is in form (a) or form (b), then at the
end of such period of possession the mortgage debt shall be
extinguished ;

(3) The mortgagor may redeem his land at any time during
the currency of the mortgage on payment of the mortgage
debt, or, in the case of a mortgage in form (a) or form (b), of
such proportion of the mortgage debt as the Collector deter-
mines to be equitable ; and

(4) In the case of a usufructuary mortgage, the mortgagor

LAND ALIENATION ACT 133

shall not be deemed to bind himself personally to repay the
mortgage money.

8. (1) In a mortgage made under section 6, the following Conditions in
conditions may be added by agreement between the parties : permitted

mortgages.

(a) A condition fixing the time of the agricultural year at

which a mortgagor redeeming his land may resume
possession thereof ;

(b) Conditions limiting the right of a mortgagor or

mortgagee in possession to cut, sell, or mortgage
trees, or to do any act affecting the permanent value
of the land ; and

(c) Any condition which the Local Government by general

or special order may declare to be admissible.

(2) In mortgages made under section 6, any condition not Power to
permitted by or under this Act shall be null and void. revise mort-

9. (1) If after the commencement of this Act a member fjfformnot
of an agricultural tribe makes a mortgage of his land in any permitted,
manner or form not permitted by or under this Act, the and mort-
Collector shall have authority to revise and alter the terms of SaSes by con"
the mortgage so as to bring it into accordance with such form dlUona sa e-
of mortgage permitted by or under this Act as the mortgagee

appears to him to be equitably entitled to claim.

(2) If a member of an agricultural tribe has before the com-
mencement of this Act made a mortgage of his land in which
there is a condition intended to operate by way of conditional
sale, the Collector shall have authority to put the mortgagee
to his election whether he will agree to the said condition
being struck out, or to accept, in lieu of the said mortgage, a
mortgage in form (a) as provided by section 6 which shall be
made for such period not exceeding the period permitted by
the said section, and for such sum of money as the Collector
considers to be equitable.

(3) If a suit is instituted in any Civil Court on a mortgage
to which subsection (1) applies, or if a suit for the enforce-
ment of a condition intended to operate by way of conditional
sale in a mortgage made before the commencement of this Act
is instituted, or is pending at the commencement of the Act in
any Civil Court against a member of an agricultural tribe, or
if an appeal in any such suit is instituted, or is pending at the
commencement of this Act in any Civil Court other than the
High Court, the Court shall, if it finds that the mortgage is
enforceable, or that the mortgagee is entitled to a decree
absolute for foreclosure, refer the case to the Collector with a
view to the exercise of the power conferred by subsections (1)
and (2) respectively.

134

APPENDIX TO CHAPTER VI

Future mort-
gage by way
of conditional
sale not per-
mitted.

Leases.

N.-W. P.&O.
II. of 1901.

Restriction
on power to
make further
temporary
alienation.

Ejectment of
morgagee,
or lessee,
remaining in
possession
after term.

10. In any mortgage of land made after the commencement
of this Act, any condition which is intended to operate by way
of conditional sale shall be null and void.

11. (1) Any member of an agricultural tribe may make a
lease of the land of which he is proprietor for any term not
exceeding twenty years, and any lease of such land made by a
member of an agricultural tribe for a longer term than twenty
years shall, if the lessee is not a member of the same tribe, and
the lessor and lessee are not members of agricultural tribes
and both residents of the district in which the land is situated,
be deemed to be a lease or farm for the term permitted by this
section.

(2) Nothing in this section shall be deemed to affect the
provisions of section 49 of the North - Western Provinces
Tenancy Act, 1901.

12. (1) During the currency of a mortgage made under
section 6 in form (a) or form (b), or of a lease under this Act,
the owner shall be at liberty to make a further temporary
alienation of the same land for such term as, together with the
term of the current mortgage or lease, will make up a term
not exceeding the full term of twenty years.

(2) Any such further temporary alienation, if made for a
longer term than is permitted by this section, shall be deemed
to be a temporary alienation for the term permitted by this
section.

13. If a mortgagee or lessee, holding possession under a
mortgage made under section 6, or under a lease made under
section 11, or under a mortgage or lease made under section 12,
remains in possession after the expiry of the term for which he
is entitled to hold under his mortgage or lease, the Collector
may, of his own motion, or on the application of the person
entitled to possession, eject such mortgagee or lessee, and
place the person so entitled in possession.

Effect of
permanent
alienation
made without
sanction.

Sanction of
Collector
required to
certain aliena-
tions of, or
charges on,
produce of
land.

General Provisions.

14. Any permanent alienation which under section 3 is not
to take effect as such until the sanction of a Collector is given
thereto shall, until such sanction has been refused, take effect
as a usufructuary mortgage in form (a) permitted by section 6
for such term not exceeding twenty years, and on such con-
ditions as the Collector considers to be reasonable.

15. Every agreement whereby a member of an agricultural
tribe purports to alienate or charge the produce of his land or
any part of, or share in, such produce for more than one year
shall not take effect for more than one year from the date of
the agreement unless the sanction of a Collector is given

LAND ALIENATION ACT 135

thereto, and shall, until such sanction is given, or if such
sanction is refused, take effect as if it had been made for one
year.

16. (1) No land belonging to a member of an agricultural Execution-
tribe shall be sold in execution of any decree or order of any ? u-jV
Civil or Revenue Court, made after the commencement of

this Act.

(2) When a valuation of proprietary rights in land has been N.-W. P. &0.
made under section 20, subsection (2) of the Bundelkhand *■ of I9°3-
Encumbered Estates Act, 1903, and the Commissioner has

passed an order staying further proceedings under section 21,
clause (/) of the said Act, the provisions of the preceding sub-
section shall not be held to prevent the sale of such land in
execution of a decree or order relating to a claim contained
in the written statement prescribed by section 9 of the said
Act.

(3) Nothing in this section shall affect sales ordered under N.-W. P. &O.
the provisions of the Bundelkhand Encumbered Estates Act, I. of 1903.
1903, or the right of Government to recover arrears of land
revenue, or any dues which are recoverable as arrears of land
revenue, in any manner permitted by law.

17. When a Civil Court passes a decree against a member Transfer to
of an agricultural tribe on a mortgage made before the com- Collector of

• > decrees on

mencement of this Act, not being a mortgage with a condition certain morl
intended to operate by way of conditional sale, and such decree gages,
would, but for the provisions of section 16, be executed by sale
of land, the Court shall transfer the execution of the decree to
the Collector, who shall offer the decree-holder in full satisfac-
tion of his decree a mortgage in form (a) or form (b) of section 6
for such period not exceeding twenty years as the Collector
considers reasonable.

18. (1) Where, by reason of any transaction which under Record-of-
this Act requires the sanction of a Collector, a person claims nSnts and
to have acquired a right, the acquisition whereof he is bound remSter.
to report under section 34 of the North-Western Provinces and

Oudh Land Revenue Act, 1901, such person shall, in making n.-W. P. &O.
his report, state whether the sanction required has been III. of 1901.
obtained or not, and his right so acquired shall not be entered
in the record-of-rights or in any annual register until he pro-
duces such evidence of the order by which such sanction is
given as may be required by any rules made under this
Act.

(2) No right claimed by reason of any transaction or con-
dition which is declared by this Act to be null and void
shall be entered in the record-of-rights or in any annual
register.

136

APPENDIX TO CHAPTER VI

Exercise of
powers of
Collector.

Application
of certain pro-
visions of the
North-West-
ern Provinces
and Oudh
Land Revenue
Act, 1901.
N.-W. P.&O.
III. of 1901.
Appearance
of legal
practitioners
forbidden.

Jurisdiction of
Civil Courts
excluded.

Exemption.

Power to
make rules.

19. The powers conferred by this Act upon a Collector may
be exercised by a Revenue Officer of higher rank, or by
any officer authorized by the Local Government in this
behalf.

20. Subject to the provisions of this Act, the provisions of
Chapters II., IX., and X. of the North-Western Provinces and
Oudh Land Revenue Act, 1901, shall, in so far as they are
applicable, apply to the proceedings of Revenue Officers under
this Act.

21. No legal practitioner shall appear on behalf of any party
interested in any proceeding before a Revenue Officer under
this Act.

22. (1) A Civil Court shall not have jurisdiction in any
matter which the Local Government or a Revenue Officer is
empowered by this Act to dispose of.

(2) No Civil Court shall take cognizance of the manner in
which the Local Government or any Revenue Officer exercises
any power vested in it or in him by or under this Act.

23. The Local Government, with the previous sanction of
the Governor-General in Council, may, by notification in the
Gazette, exempt any district or part of a district, or any person
or class of persons, from the operation of this Act or of any of
the provisions thereof.

24. (1) The Local Government may make rules for carrying
into effect the purposes of this Act.

(2) In particular, and without prejudice to the generality of
the foregoing power, the Local Government may make rules
prescribing the Revenue Officers to whom applications may be
made, and the manner and form in which such applications
shall be made and disposed of.

THE CO-OPERATIVE CREDIT SOCIETIES
ACT, 1904

(X. of 1904)

CONTENTS

Sections. Preliminary.

1. Short title and extent.

2. Definitions.

Constitution.

3. Constitution of societies.

4. Members of society.

CO-OPERATIVE CREDIT SOCIETIES ACT 137

Registration.

5. The Registrar.

6. Registration and incorporation of societies.

Management.

7. Liability of members.

8. Disposal of profits.

9. Restrictions on borrowing.

10. Restrictions on loans.

11. Deposit of society's funds.

Shares and Interests of Members.

12. Limit on capital held by member.

13. Votes of members.

14. Restrictions on transfer of share or interest.

15. Shares, etc., not liable to attachment.

16. Transfer of interest on death of member.

17. Liability of past member.

18. Liability of the estates of deceased member.

Priority of Society's Claim against a Member.

19. Prior claim of society as against crops, agricultural

produce, cattle, implements, and raw material.

20. Charge and set-off in respect of shares or interest of

member.

Audit, Inspection, and Inquiry.

21. Audit, inspection, and inquiry.

22. Mode of proof of entries in society's books.

Dissolution of a Society.

23. Dissolution.

24. Cancellation of registration of society.

Exemptions from Taxation.

25. Power to exempt from income tax, stamp duty, and

registration fees.

Debts Due to Government.

26. Recovery of sums due to Government.

Rules.

27. Rules.

133

APPENDIX TO CHAPTER VI

Miscellaneous.

28. Indian Companies Act, 1882, not to apply.

29. Special power to Local Government to register any

association under Act.

Short title
and extent.

Definitions.

ACT No. X. of 1904.

Passed by the Governor-General of India in Council.
(Received the Assent of the Governor-General on the 15th March,

1904.)

An Act to Provide for the Constitution and Control
of Co-operative Credit Societies.

Whereas it is expedient to encourage thrift, self-help, and
co-operation among agriculturists, artisans, and persons of
limited means, and for that purpose to provide for the con-
stitution and control of co-operative credit societies, it is hereby
enacted as follows :

Preliminary.

1. (1) This Act may be called the Co-operative Credit
Societies Act, 1904 ; and

(2) It extends to the whole of British India.

2. In this Act, unless there is anything repugnant in the
subject or context —

(a) ' By-law ' means a rule made by a society in the

exercise of any power conferred by this Act, or by
any rule made under this Act ;

(b) ' Committee ' means the governing body of a society

to whom the management of its affairs is entrusted ;

(c) ' Member' includes a person joining imthe application

for the registration of a society, and a person
admitted to membership after registration in accord-
ance with the by-laws and any rules made under
this Act ;

(d) ' Officer ' includes a chairman, secretary, treasurer,

member of committee, or other person empowered
under the rules applying to any society or the
by-laws thereof to give directions in regard to the
business of the society ;

(e) l Registrar ' means a person appointed to perform the

duties of a Registrar of Co-operative Credit Societies
under this Act ; and
(/) ' Society' means a co-operative credit society registered
under this Act.

CO-OPERATIVE CREDIT SOCIETIES ACT 139

Constitution.

3. (1) A society shall consist of ten or more persons above Constitution
the age of eighteen years — of societies-

(a) Residing in the same town or village, or in the same

group of villages ; or,

(b) Subject to the sanction of the Registrar, consisting of

members of the same tribe, class, or caste.

(2) Societies shall be either rural or urban. In a rural
society not less than four-fifths of the members shall be agri-
culturists. In an urban society not less than four-fifths of the
members shall be non-agriculturists.

(3) When any question arises as to whether for the purposes
of this Act a person is an agriculturist or a non-agriculturist,
or whether two or more villages shall be considered to form a
group, or whether any person belongs to a tribe, class, or caste,
the question shall be decided by the Registrar, whose decision
shall be final.

4. The members of a society shall be — Members of

society.

(a) Persons joining in the application mentioned in

section 6, subsection (1), and registered as a society
under subsection (2) of the same section ;

(b) Persons qualified in accordance with the requirements

of section 3, and admitted by the society in accord-
ance with the provisions of this Act, and with the
by-laws of the society :

Provided that a person so admitted shall not exercise the
rights of a member unless or until he has made such payment
to the society in respect of membership, or acquired such
interest in the society, as may be prescribed by the rules made
under this Act or the by-laws of the society.

Registration.

5. The Local Government may appoint a person to be The Registrar.
Registrar of Co-operative Credit Societies for the Province or

any portion of it.

6. (1) Any ten or more persons qualified in accordance with Registration
the requirements of section 3, and agreeing each to make such and incor"
payment or acquire such interest as aforesaid, may apply to Poratl.on of
the Registrar to be registered as a rural or an urban society,

as the case may be, and the persons by whom or on whose
behalf such application is made shall furnish such informa-
tion in regard to the proposed society as the Registrar may
require.

140

APPENDIX TO CHAPTER VI

Liability of
members.

(2) If the Registrar is satisfied that the persons proposing to
form a society are qualified in accordance with the require-
ments of section 3, and have complied with the provisions of
this Act and with the rules made thereunder, he may, if he
thinks fit, register the society accordingly, and the society shall
thereupon become and be a body corporate by the name under
which it is registered, with perpetual succession and a common
seal, and with power to hold property, movable or immovable,
to enter into contracts, to institute and defend civil suits, and
to do all things necessary for the purposes of its constitution.

(3) Every society shall have an address, registered in
accordance with the rules made under this Act, to which all
notices and communications may be sent.

(4) The registered name of a society shall distinguish
whether the society is rural or urban, and if the liability of the
members is limited, the word ' limited ' shall be added to such
name.

(5) No charge shall be made for registration under this
section.

Management.

7. The liability of each member of a society for the debts of
the society shall be as follows :

(a) In the case of a rural society, such liability shall, save

with the special sanction of the Local Government,
be unlimited ;

(b) In the case of an urban society, such liability shall be

unlimited or limited, as may be provided by the
by-laws or by any rules made under this Act.

Disposal of 8. (1) No dividend or payment on account of profits shall

profits. be paid to a member of a rural society, but all profits made by

such a society shall be carried to a fund (to be called the
reserve fund) :

Provided that, when such reserve fund has attained such
proportion to the total of the liabilities of the society, and
when the interest on loans to members has been reduced to
such rates, as may be determined by the by-laws or rules
made under this Act, any further profits of the society, not
exceeding three-fourths of the total annual profits, may be
distributed to members by way of bonus.

(2) Not less than one-fourth of the profits in each year of an

urban society shall be carried to a fund (to be called the reserve

fund) before any dividend or payment on account of profits is

paid to the members or any of them.

Restrictions g. A society may receive deposits from members without

on borrowing, restriction, but it may borrow from persons who are not

CO-OPERATIVE CREDIT SOCIETIES ACT 141

members only to such extent and under such conditions as
may be provided by its by-laws or by rules made under this
Act.

10. (1) A society shall make no loan to any person other Restrictions
than a member : on loans-

Provided that, with the consent of the Registrar, a society
may make loans to a rural society.

(2) Save with the permission of the Registrar to be given by
general order in the case of each society, a rural society shall
not lend money on the security of movable property.

(3) The Local Government may, by general or special order,
prohibit or restrict the lending of money on mortgage of im-
movable property or any kind thereof by any society or class
of societies.

11. A society may deposit its funds in the Government Deposit of
Savings Bank or with any banker or person acting as a banker s°c>ety s
approved for this purpose by the Registrar.

Shares and Interests of Members.

12. Where the liability of the members of a society is limited Lin}i,; on
by shares, a member shall not hold more than such portion of £aPltal heI<'
the capital of the society, subject to a maximum of one-fifth, as

may be prescribed by any rules made under this Act :

Provided that no member of such a society shall hold more
shares than represent a nominal value of one thousand rupees.

13. (1) Where the liability of the members of a society is Votes of
not limited by shares, each member shall, notwithstanding the mem°ers.
amount of his interest in the capital, only have one vote as a
member in the affairs of the society.

(2) Where the liability of the members of a society is limited
by shares, each member shall have as many votes as may be
prescribed by the by-laws of the society.

14. (1) A member shall not transfer any share held by him Restrictions
or his interest in the capital of the society or any part thereof, °? V"ansfer
unless he has held such share or interest for one year at least, interest.

(2) The share or interest of a member in the capital of a
society shall not be transferred or charged, unless to the society
or to a member of the society and subject to any conditions as
to maximum holding prescribed by this Act or by the by-laws
or by any rules made under this Act.

15. Subject to the provisions of section 20, the share or Shares or
interest of a member in the capital of a society shall not be I"tv[est not
liable to attachment or sale under any decree or order of a attachment
Court of Justice in respect of any debt or liability incurred by

such member, and neither the Official Assignee nor a Receiver

appointed under Chapter XX. of the Code of Civil Procedure XIV. of 1882.

1 42

APPENDIX TO CHAPTER VI

Transfer of
interest on
death of
member.

Liability of
past member.

Liability of

the estates
of deceased
member.

shall be entitled to or have any claim on such share or
interest.

1 6. On the death of a member, the society may pay to or
transfer to the credit of the person nominated in accordance
with the rules made in this behalf, or, if there is no person so
nominated, such person as may appear to the Committee to be
entitled to receive the same as heir or legal representative of
the deceased member, a sum representing the value of such
member's share or interest, as ascertained in accordance with
the rules or by-laws and all moneys due to him from the
society, and the society shall thereupon be absolved from all
liability in respect of such share or interest or other moneys as
aforesaid.

17. The liability of a past member for the debts of the
society as they existed at the time when he ceased to be a
member shall continue for a period of one year from the date
of his ceasing to be a member.

18. The estate of a deceased member shall be liable for a
period of one year from the time of his decease for the debts of
the society as they existed at the time of his decease.

Prior claim
of society as
against crops,
agricultural
produce,
cattle, imple-
ments, and
raw material.

Charge and
set-off in
respect of
shares or
interest of
member.

Priority of Society's Claim against a Member.

ig. Subject to any prior claim of the Government in respect
of land-revenue or any money recoverable as land-revenue or
of a landlord in respect of rent or any money recoverable
as rent, a society shall be entitled in priority to other creditors
to enforce its claim —

(a) Upon the crops or other agricultural produce of a

member or past member at any time within a year
from the date when seed or manure was advanced
or money for the purchase of seed or manure was
lent to such member or past member, in respect of
the unpaid portion of such advance or loan :

(b) Upon any cattle, agricultural or industrial implements

or raw materials or manufactures, supplied by the
society or purchased in whole or in part with money
lent by the society, in respect of the outstanding
liability on account of such supply or loan.

20. A society shall have a charge upon the shares or interest
in the capital and on the deposits of a member or past member
and upon any dividend, bonus, or profits payable to a member
or past member in respect of any debt due from such member or
past member to the society, and may set-off any sum credited
or payable to a member or past member in or towards payment
of any such debt.

CO-OPERATIVE CREDIT SOCIETIES ACT 143

Audit, Inspection, and Inquiry.

ax. (1) The Registrar shall audit the accounts of each 4udit- insPec-
society once at least in every year. inquiry1

(2) No charge shall be made in respect of any audit made
under subsection (1).

(3) The audit under subsection (1) shall include an examina-
tion of overdue debts, if any, and a valuation of the assets and
liabilities of the society.

(4) The Registrar, the Collector or any person authorized
in this behalf by the Registrar or the Collector may at any
time inspect the books, accounts, papers and securities of a
society, and every officer of the society shall furnish such in-
formation in regard to the transactions and working of the
society as the person making such inspection shall require.

(5) The Registrar may of his own motion, and shall on the
request of the Collector, or on the application of a majority of
the Committee or not of less than one-third of the members,
hold an inquiry into the constitution, working and financial
condition of a society, and all officers and members of the
society shall furnish such information in regard to the affairs
of the society as the Registrar may require.

(6) Where an inquiry is held under subsection (5), the
Registrar may apportion the costs, or such part of the costs as
he may think right, between the society, the members demand-
ing an inquiry and the officers or former officers of the society.

(7) Any sum awarded by way of costs under subsection (6)
may be recovered, on application to a magistrate having juris-
diction in the place where the person from whom the money is
claimable resides for the time being, by the distress and sale of
any movable property within the limits of the jurisdiction of
such magistrate belonging to such person.

22. A copy of any entry in a book of a society regularly Mode of
kept in the course of business, shall, if certified in such manner Pr° . of

• entries in

as may be prescribed by rules made under this Act, be received, societjes-
in any suit to recover a debt due to the society, as prima facie books,
evidence of the existence of such entry, and shall be admitted
as evidence of the matters, transactions and accounts therein
recorded in every case where, and to the same extent as, the
original entry itself is now by law admissible, but not further
or otherwise.

Dissolution of a Society.

23. (1) If the Registrar, after holding an inquiry under Dissolution,
section 21, subsection (5), or on receipt of an application made

by three-fourths of the members of a society, is of opinion that

i44 APPENDIX TO CHAPTER VI

a society ought to be dissolved, he may cancel or may refuse
to cancel the registration of the society.

(2) Any member of a society may, within two months from
the date of an order made under subsection (1), appeal from
such order to the Local Government.

(3) Where no appeal is presented within two months from
the making of an order cancelling the registration of a society,
the order shall take effect on the expiry of that period.
Where an appeal is presented within two months, the order
shall not take effect until it is confirmed by the Local
Government.

(4) Where an order made under subsection (1) cancelling
the registration of a society takes effect, the society shall cease
to exist as a corporate body.

Cancellation 24. (1) Where the registration of a society is cancelled
of registration uncjer section 23, the Registrar may appoint a competent
o society. person to be liquidator of the society.

(2) A liquidator appointed under subsection (1) shall have
power to institute and defend suits on behalf of the society by
his name of office, and shall also have power —

(a) To sue for and recover any sums of money due to the

society at the date of such cancellation ;

(b) To determine the contribution to be made by the

members and past members of the society respec-
tively to the assets of the society ;

(c) To investigate all claims against the society, and, sub-

ject to the provisions of this Act, to decide questions
of priority arising between claimants ;

(d) To determine by what persons and in what propor-

tions the cost of the liquidation are to be borne ;
and
(c) To give such directions in regard to the collection
and distribution of the assets of the society as may
appear to him to be necessary for winding up the
affairs of the society.

(3) Subject to any rules of procedure made under this Act,
a liquidator appointed under this section shall, in so far as
such powers are necessary for carrying out the purposes of
this section, have power to summon and enforce the attendance
of witnesses and to compel the production of documents by the
same means, and (so far as may be) in the same manner as is
provided in the case of a civil court under the Code of Civil

XIV. of 1882. Procedure.

(4) The rules may provide for an appeal to the court of the
District Judge from any order made by a liquidator under this
section.

CO-OPERATIVE CREDIT SOCIETIES ACT 145

(5) Orders made under this section may be enforced as
follows :

(a) When made by a liquidator, by any civil court having

local jurisdiction in the same manner as the decree
of such court ;

(b) When made by the court of the District Judge in the

matter of any such appeal as aforesaid, in the same
manner as a decree of such court made in any suit
pending therein.

(6) Save in so far as is hereinbefore expressly provided, no
civil court shall have any jurisdiction in respect to any matter
connected with the dissolution of a society under this Act.

Exemptions from Taxation.

25. (1) The Governor-General in Council, by notification in Power to
the Gazette of India, may in the case of any society or class of exempt from
society remit— income-tax,

' stamp-duty,

(a) The income-tax payable in respect of the profits of and registra-

the society, or of the dividends or other payments tl0n fees-
received by the members of the society on account
of profits ;

(b) The stamp-duty with which, under any law for the

time being in force, instruments executed by or on
behalf of a society, or by an officer or member and
relating to the business of such society, or any class
of such instruments, are respectively chargeable ;

(c) Any fee payable under the law of registration for the

time being in force.

(2) A notification exempting any society from the fees
referred to in subsection (1), clause (c), may provide for the
withdrawal of such exemption.

Debts due to Government.

26. (1) All sums due from a society or from an officer or Recovery of
member or past member of a society as such to the Govern- sums due t0
ment, including any costs awarded to the Government under Government,
section 21, subsection (6), may be recovered in the same
manner as arrears of land revenue.

(2) Sums due from a society to Government and recoverable
under subsection (1) may be recovered, firstly, from the pro-
perty of the society ; secondly, in the case of a society of
which the liability of the members is limited, from the mem-
bers subject to the limit of their liability ; and, thirdly, in the
case of other societies, from the members.

10

146 APPENDIX TO CHAPTER VI

Rules.

Rules. 27. (1) The Local Government may, for the whole or any

part of the province and for any society or class of societies,
make rules to carry out the purposes of this Act.

(2) In particular and without prejudice to the generality
of the foregoing power, such rules may —

(a) Prescribe the forms to be used in applying for the

registration of a society and the procedure in the
matter of such applications ;

(b) Prescribe the conditions to be complied with by

persons applying for registration and by persons
applying for admission or admitted as members, and
provide for the election and admission of members
from time to time, and the amount of payment to be
made and interests to be acquired before exercising
rights of membership ;

(c) Provide for the withdrawal and expulsion of members

and for the payments to be made to members who
withdraw or are expelled and for the liabilities of
past members ;

(d) Provide for the mode in which the value of a deceased

member's interest shall be ascertained, and for the
nomination of a person to whom such interest may
be paid or transferred ;

(e) Subject to the provisions of section 12, prescribe the

maximum number of shares or portion of the capital
of a society which may he held by a member ;

(/) Prescribe the payments to be made and the con-
ditions to be complied with by members applying
for loans, the period for which loans may be made,
and the amount which may be lent to an individual
member ;

(g) Prescribe the' proportion to the total liabilities to be
attained by the reserve fund and the rate to which
interest on loans to members is to be reduced before
profits may be distributed to members of a rural
society ;

(h) Regulate the manner in which capital may be raised
by means of shares or debentures or otherwise ;

(i) Provide for general meetings of the members, and for
the procedure at such meetings, and the powers to
be exercised by such meetings ;

(j) Provide for the appointment, suspension, and removal
of the members of the committee and other officers,
and for the procedure at meetings of the committee,

CO-OPERATIVE CREDIT SOCIETIES ACT 147

and for the powers to be exercised and the duties to
be performed by the committee and other officers ;
(k) Prescribe the matters in respect of which a society
may or shall make by-laws, and for the procedure to
be followed in making, altering, and abrogating
by-laws, and the sanction to be required to such
making, alteration, or abrogation ;
(/) Prescribe the accounts and books to be kept by a
society, and provide for the audit of such accounts,
and the charges, if any, to be made for such audit,
and for the periodical publication of a balance-sheet
showing the assets and liabilities of a society ;
(m) Provide for the persons by whom, and the form in
which, copies of entries in books of societies may be
certified ;
(n) Provide for the formation and maintenance of a register
of members, and, where the liability of the members
is limited by shares, of a register of shares ;
(0) Provide for the rate at which interest may be paid on
deposits, for the formation and maintenance of reserve
funds, and the objects to which such funds may be
applied, and for the investment of any funds under
the control of the society ;
(p) Provide that any dispute touching the business of a
society between members or past members of the
society, or persons claiming through a member or
past member, or between a member or past member
or persons so claiming, and the committee or any
officer, shall be referred to the Registrar for decision,
or, if he so directs, to arbitration, and prescribe the
mode of appointing an arbitrator or arbitrators, and
the procedure to be followed in proceedings before
the Registrar or such arbitrator or arbitrators, and
the enforcement of the decisions of the Registrar or
the awards of arbitrators :
(q) Prescribe the conditions to be complied with by a
society applying for the financial assistance of
Government ; and
(y) Determine in what cases an appeal shall lie from the
orders of the Registrar, and prescribe the procedure
to be followed in presenting and disposing of such
appeals.

(3) The power to make rules conferred by this section is
subject to the condition of the rules being made after previous
publication.

(4) All rules made under this section shall be published in

10 — 2

148 APPENDIX TO CHAPTER VI

the local official Gazette, and on such publication shall have
effect as if enacted in this Act.

(5) A copy of the rules relating to a society, and of the
by-laws thereof for the time being in force, shall be kept open
to inspection at all reasonable times, free of charge, at the
registered address of the society.

Miscellaneous.

Indian Com- 28. The provisions of the Indian Companies Act, 1882, shall
panies Act, not apply to societies registered under this Act.
1882, not to 2g. (1) Notwithstanding anything contained in this Act, the

vY of 1882 Local Government may, by special order in each case, and
Special power subject t0 such conditions as it may impose, permit any
to Local Gov- association of not less than ten persons above the age of
ernment to eighteen years to be registered as a rural or an urban society
register any under this Act.

underaActn (2) ^ societv so registered shall be subject to the provisions

of this Act to the same extent as any other society :

Provided that the Local Government may at any time by
order exempt such society from any of such provisions, or
may direct that they shall apply to such society with such
modifications as may be specified in the order.

CHAPTER VII

AGRICULTURAL CAPITAL

Broadly speaking, the productiveness of any industry
is in proportion to the amount of capital invested in
it. Where large amounts of capital are employed, the
product of industry is large ; and where the capital
invested is small, the gross output is small also. This
is as true of agriculture as of other industries. The
produce per acre is largest in those countries in which
capital is most freely invested in agriculture. In
England, where the yield per acre is heavier than in
any other country (with the possible exception of the
Netherlands), both landlord and tenant are in the
habit of investing capital in the farm. But in countries
in which the industry is in the hands of small farmers,
whether proprietors or tenants, agriculture has hitherto
always suffered from want of capital. In France and
Germany, no less than in Ireland, the peasant secures
a smaller return than his farm is capable of yielding,
owing to the want of capital.

The same form of land tenure produces in India the
same result. Indian agriculture is poorly supplied
with capital. Three persons in India have an interest
in agriculture — the landlord, the tenant, and the
Government. With regard to the first, it is not the
custom of the country for the landlord to invest
capital in the improvement of his estate to any impor-
tant extent, and his contribution to agricultural capital
usually takes the form of remittances of rent or other

149

i5o

AGRICULTURAL CAPITAL

accommodations to enable the tenant to carry out
improvements. It is therefore by the tenant and the
Government that the bulk of the agricultural capital is
supplied.

The capital which the tenant, financed by the village
money-lender, contributes to the development of his
industry consists, in the first place, of a pair of plough-
oxen, worth from Rs. 30 to Rs. 80 ; a plough and
other rude agricultural implements, worth perhaps
another Rs. 5. His circulating capital is represented
by seed, a little manure, and the food of his plough-
oxen. But, in addition to this small and indispensable
expenditure, there is another and very important form
of capital, with regard to which the tenant's contribu-
tion has been, in the aggregate, considerable. The
most important means of securing and increasing the
product of agriculture in India is irrigation, and almost
all the private capital sunk in permanent improve-
ments comes under this head. Out of a total of
11,000,000 acres under irrigation in an ordinary year
in the United Provinces, 8,500,000 acres are irrigated
by works constructed by private individuals. Of this
amount, 5,750,000 acres are irrigated from wells,
2,000,000 acres from tanks, and the balance of 750,000
acres from other miscellaneous works.

The area irrigated from wells varies very greatly with
the nature of the season. In a wet year like 1894-95
it may fall to 3,000,000 acres ; in a year of drought
it rises to over 7,000,000 acres. The leading facts
regarding well irrigation in these provinces are given
in the following table :

Number of Wells used for Irrigation.

Gross Area irrigated in a
Normal Year.

Permanent.

Temporary.

Total.

Total.

Average per Well.

500,000

830,000

1,330,000

Acres.
5,731,000

1

Acres.

4*3

SPRING WELLS 151

Fourteen per cent, of the gross cropped area is under
well irrigation.

In popular language, wells are classed as permanent
or temporary (pakka and kachcha), and this rough-
and-ready distinction corresponds to a well-known
economic observation with regard to capital — namely,
that the more elaborate forms of capital are repaid
only after repeated use, and that the simpler forms of
capital are replaced by use in a single season.

There are, broadly speaking, two descriptions of
permanent wells — spring wells and percolation wells.
In the great alluvial tract north of the Jamna a per-
manent well usually consists of a brickwork cylinder
sunk through the upper strata of alternate clay or
loam and sand, down to an impervious stratum of stiff
clay, known as the mota, through which a hole is made
into the sandy stratum below. Through this hole a
plentiful supply of water rises into the cylinder, some-
times to a height above that of the general level of the
subsoil water-table outside the wells. These wells
are therefore designated spring wells. When the
hole is first made through the stiff clay stratum or
mota, a certain quantity of sand is forced up into the
well with the water. After a short time the emission
of sand ceases, and if the mota is a good one (3 to
5 feet of hard clay) no further sinking of the well
takes place. The emission of sand ceases only when
the hollow inverted cone, which forms below the
mota, presents a large enough surface to admit of the
required volume of water being discharged through it
at a velocity which will not disturb the grains of sand.
The cost of a well of this description depends chiefly
on the depth of the mota, which may be great even
though the subsoil water is high. The average cost
to the cultivator of a well of two buckets may be
put at Rs. 200 or Rs. 300, and the average area which
each well will irrigate during the rabi season at 8 or
9 acres.

152 AGRICULTURAL CAPITAL

When the mota is at a great depth, or does not
exist, water can only enter the well slowly by percola-
tion through its sides or through the sand on which
the well rests. The well has then to be of much larger
diameter than is necessary in the case of a spring
well ; otherwise the sand would be drawn with the
water into the well, and the masonry cylinder would
gradually sink. Although wells of this description are
of larger diameter, they are usually of less depth than
the spring wells. They are cheaper to construct, but
irrigate a smaller area.

During the last decade the number of masonry
wells in use for irrigation in the United Provinces has
increased by 51,000, or by about 12 per cent. This
increase, though substantial, is proportionally much
less than those shown in the provinces of Madras,
Bombay, and the Panjab. The fact, however, of a
very large increase during the past thirty years in the
districts which have recently come under revision of
settlement is unhesitatingly affirmed by all settlement
officers, and may be accepted. In the eleven districts
of Oudh the number recorded at settlement has risen
from 50,835 to 119,942, an increase of 132 per cent. In
some parts of these districts the number of wells is
now so great that there scarcely seems room for any
further large increase without affecting the supply of
water in existing wells in dry years. For instance, in
the Haidargarh parganna of Barabanki, covering an
area of over 100 square miles, there are twenty-seven
wells to the square mile of total area, or one well
for every 14 acres of cultivation, and more than two-
thirds of the wells are permanent. But the principal
cause of the small increase during the past decade in
the number of masonry wells in these as compared
with other provinces is no doubt to be found in the
reliance which is placed on temporary wells.

In no province in India are the general facilities for
the construction of small temporary wells at all com-

TEMPORARY WELLS 153

parable with those of these provinces. There are, it
is true, large numbers of such wells in the Panjab,
but even in that province there are four masonry
wells to one temporary well, and the total number of
temporary wells does not exceed 75,000 ; whereas in
the United Provinces in a dry year nearly 1,000,000
temporary wells are in use in irrigation — that is, for
each permanent well there are two temporary wells.
They differ from the permanent wells in being lined
with a cylinder of wood, wickerwork, or brushwood,
instead of masonry. The lining is generally carried
up to only a few feet above the water surface. The
temporary well may, like the permanent well, receive
its supply either from a spring or from percolation.
Where the supply is wholly by percolation, the tem-
porary well is a mere hole in the ground, from which
water is drawn by manual labour with the aid of
a wheel or a weighted lever. Such a well seldom
irrigates more than 2 acres, and often only a
fraction of an acre. A good spring well of the tem-
porary kind, such as are found extensively in the
Ganges-Jamna Doab, will irrigate 4 or more acres in
a season. They are worked by bullock-power, and
occasionally carry more than one water-bag. The cost
of a temporary well may be anything from Rs. 2 to
Rs. 50, according to its depth and the nature of the
lining.

The irrigation works other than wells constructed
by private enterprise are comparatively unimportant.
There are practically no embanked private tanks of
any considerable size in the United Provinces. Close
to almost every village there is a pond, the excavation
of which afforded materials for the construction of the
dwelling-houses ; and occasionally in some parts of
the country, especially in Mirzapur and the Bundel-
khand districts, water is held up by small embankments
across depressions or drainage lines. But, except in
Mirzapur and the adjoining Trans-Jamna districts,

154 AGRICULTURAL CAPITAL

where the tanks are often fed by diverting natural
streams, these two classes of tanks are used chiefly
for watering cattle and for bathing- purposes ; and the
j'hils, or natural depressions, which are found in large
numbers, more especially in the eastern districts of
the submontane and central tracts, account for nearly
the whole of the irrigation classed under tanks. In a
favourable year over 2,250,000 acres are irrigated from
this source ; but in a year of drought the supply of the
tanks fails, and the area falls to under 1,000,000. In
many districts, in a year of severe drought, it may
even be reduced to one-fourth of the area of a normal
year. But though the tanks fail when they are most
required, their protective value is very considerable.
They insure a good crop to a large area in all ordinary
years, and, occupying as they do a considerable portion
of the ground surface, their effect in maintaining the
level of the subsoil water must be very great.*

From the facts and figures which I have just recited
it will be seen how numerous and important are the
works of irrigation provided by private individuals.
The Irrigation Commissioners of 1903 were, however,
of opinion that, notwithstanding the large extent to
which well irrigation was already practised in the
United Provinces, there was wide room for its exten-
sion. There are two obstacles to the construction of
wells by the tenant — (1) the absence of capital, and
(2) the fear that he may be rented on his improve-
ments. With regard to the latter, it is true that
tenants with a permanent right of occupancy are pro-
tected from enhancement of rent for a period of ten
years, and the law also provides that their rents shall
not be enhanced on the ground that the productive
capacity of the land held by the tenant has been in-
creased by an improvement effected by his agency or
at his expense. By another provision, however, the

* Abridged from the ' Report of the Indian Irrigation Commis-
sion, 1901-03/ chap. xix.

INDUCEMENTS TO BUILD WELLS 155

landlord is allowed to claim enhancement of rent on
the ground that the rate paid by the tenant is below
the prevailing rate paid by occupancy tenants for land
of similar quality and enjoying similar advantages.
The consequence is that the tenant who for the first
time introduces well irrigation into a tract previously
unirrigated is not exempt from enhancement of his
rent up to the rate prevailing on land in the same
neighbourhood in which similar facilities for irrigation
exist. The Irrigation Commissioners of 1903 recom-
mended that the law should be altered for the benefit
of the tenant. ' The existing provisions,' they said,
'are defended on the ground that the difference between
the dry and the wet rate is the equivalent of a royalty
on the subsoil water to which the landlord is fairly
entitled. Admitting this, however, it must be remem-
bered that Government is entitled to take a similar
royalty from landowners when they make irrigational
improvements, and that Government foregoes this
share of its royalty for at least a whole thirty years'
period of settlement. Tenants who make similar im-
provements would seem to be entitled to receive from
their landowners not less liberal treatment than im-
proving landowners receive from the State. We
submit, therefore, for consideration the suggestion
that when a tenant constructs a permanent well, the
land commanded by which was previously unirrigated
and assessed only at dry rates at the time of the con-
struction of the well, should be exempt from wet rates
until the expiry of ten years after the period for which
the tenant is entitled to hold the land at the existing
rental. Thus, if a tenant constructs the well at the
commencement of the ten years' period for which his
rent cannot be enhanced, he will secure exemption
from wet rates for a period of twenty years. Such a
measure as we propose would, we believe, prove an
effective inducement to tenants to make permanent
masonry wells. It may be opposed by the landowners,

156 AGRICULTURAL CAPITAL

but if it results in the extended improvement of their
land it will tend to their permanent benefit. It cannot
be considered unjust to them, since the additional
period of exemption suggested for the tenant's im-
provement is only one-third of that which the land-
owner receives from Government for his own im-
provement.'*

The most serious obstacle to the construction of
wells is, however, the one first alluded to — namely,
the tenant's want of capital. The remedy for this evil
proposed by the Irrigation Commissioners was that
the Government should loan the necessary capital to
the tenant, and recover it from him by annual instal-
ments. This is the system of State advances known
in India as takavi. These advances are nowadays
regulated by specific Acts — namely, the Land Improve-
ments Loan Act (XIX. of 1883) and the Agriculturists'
Loans Act (XII. of 1884). Under the former Act
money is advanced for specific purposes of land im-
provement, and under the latter for seed, cattle, and
other miscellaneous agricultural purposes. But the
object of the two Acts is closely connected, for it will
often be the case that in order to make efficient use of
his improvement the cultivator will find it necessary
to provide himself with cattle and manure, well gear-
ing, and the like, if not with seed.

Under these two Acts the Government has made
considerable contributions to the agricultural capital
of the provinces. During the ten years ending 1900-01
Rs. 54,72,000 were advanced under the Agriculturists'
Loans Act and Rs. 26,49,000 under the Land Improve-
ment Loans Act.f But the Irrigation Commissioners
were of opinion that the system was capable of very
much greater development. The spirit in which these
Commissioners approach the subject of State advances
shows how far opinion has travelled from the ancient

* ' Indian Irrigation Commission Report,' part ii., p. 203.
t Ibid., p. 59.

STATE LOANS 157

orthodoxy of laissez /aire. So far from entertaining
any prima facie objection to the use of the resources
of the State for the development of private enterprise,
the Commissioners appear to have been actuated by a
passionate prepossession in favour of State advances.
They are not content to wait until the cultivator shall
approach the State with a demand for the loan of
capital, but they lay down the principle that it is the
duty of Government officers to create and stimulate
such a demand. The first of their recommendations
runs as follows :

1 Although there are defects in the takavi system to
which we shall advert below, and improvements to be
made, yet perhaps the first and the principal measure
required is to quicken the interest of all classes of
revenue officers in takavi work, to place liberal allot-
ments at their disposal, and to inquire strictly into the
causes of failure to spend up to them.'

It is certainly a new doctrine that an officer should
be exposed to reprimand for having failed to persuade
the cultivators in his district to accept a loan from the
State ; and the older generation of civilians, who were
saturated with the economics of the individualists,
would have been scandalized at the proposal. But in
our day we have had many proofs of the inadequacy
of laissez /aire as a guide to economic legislation,
and we have now no prepossessions against State
assistance to private enterprise if it can be given in a
form which has been proved to work well. This can
be proved with regard to loans for agricultural im-
provements. As the money advanced to the cultivator
is, in an overwhelming majority of cases, faithfully
repaid, these loans neither impoverish the State nor
demoralize the cultivator. The Irrigation Commis-
sioners were much impressed with ' the general
integrity of takavi borrowers,' and they declare that
' at present the amounts found to be irrecoverable are
inappreciable.' All their proposals, therefore, are

158 AGRICULTURAL CAPITAL

directed towards encouraging the cultivators to re-
ceive more loans from the State for agricultural im-
provements. They begin by insisting that a condition
of success is that all revenue officers should take an
active interest in the policy of State advances, for
unless sympathetically administered by the local
officers the measures they propose must remain in-
operative. With this caution they recommend :

i. That the rate of interest on these loans should be
reduced to 5 per cent, in all provinces.

2. That the collection should be made as elastic as
possible.

It is alleged that the unpopularity of the takavi
system is due to the rigidity of the system of collec-
tion. The Commissioners accordingly recommend
'that suspension should be given without hesitation
whenever, from causes beyond the control of the
borrower, his crops fail to such an extent as to render
the payment of the year's instalment unduly burden-
some to him. That whenever suspensions of revenue
are granted, they should carry with them automatically
suspensions of the takavi instalment which may be
due the same year. That the officer who has autho-
rity to grant the loan should also have authority to
grant suspensions ; and that the suspended instalment
should not be made payable in the ensuing year with
the instalment of that year, but that the effect of the
suspension should be to postpone by one year the
payment of all remaining instalments due on the loan.'

The third recommendation is :

3. The repayment of the loan should be extended
over a long period, the principle being that the repay-
ment of the loan should be extended over all the
period of the duration or ' life ' of the improvement.
In cases in which, as, for instance, in the wells of the
Bombay Deccan, the improvements are practically
indestructible, the period for repayment should be
fifty years. At 5 per cent, interest a payment of

LARGE IRRIGATION WORKS 159

Rs. 5-8 would extinguish within that period a debt of
Rs. 100, whereas the perpetual charge would be Rs. 5,
or only 8 annas less per annum. No reasonable man,
as the Commissioners remark, would prefer the per-
petual charge for the sake of saving the 8 annas.

The other recommendations of the Commissioners
refer to details of administration or to proposals for
alterations in the law ; the general principle upon
which all these recommendations are based is the
principle of removing all obstacles to the contraction
of a loan from Government. The policy now recog-
nised is that the Government should find the capital
for agricultural improvements, and should loan it to
individual cultivators at easy rates.

But from time immemorial it has been to the State
rather than to private enterprise that the people have
looked for the construction of irrigation works on a large
scale. In the Rajput principalities of Bundelkhand
and Rajputana many lakes of great extent and beauty
have been constructed at the expense of the State
treasury. These lakes (or tanks, as they are called in
India) are formed by constructing a dam across the
natural drainage between two hills ; in the rainy
season the water which would otherwise escape into
the rivers is held up by the dam and the surrounding
hills, and spreads into a large expanse, which has the
appearance of a natural lake. The water is drawn off
by channels to irrigate the fields lying below the dam.
It is a popular belief that religious merit attaches to
the construction of these reservoirs, and it would be
difficult to deny this title to works of such beauty
and utility. In British Bundelkhand there are
several of these lakes, which tradition ascribes to
the Rajput princes who ruled before the coming of
the Mohammedans.

It is, however, only in districts of a certain physical
configuration that the construction of reservoirs is
possible. It is also evident that the water available

160 AGRICULTURAL CAPITAL

for irrigation from a reservoir in which the water is at
rest is much less than from a canal in which the water
is always moving.

The construction of canals by the State was first
begun under the Mohammedan kings of Delhi. A
canal from the Jamna was built as far back as 1351
by the pious Firoz Shah Tughlak, which to this day
supplies irrigation along 200 miles of its ancient
course, and now brings water to Delhi. The great
Akbar also constructed important works, and gave
orders ' that on both sides of the canal trees of every
description, both for shade and blossom, shall be
planted, so as to make it like the canal under the tree
of Paradise, and that the sweet flavour of the rare
fruits may reach the mouth of everyone, and from
these luxuries a voice may go forth to travellers call-
ing them to rest in the cities, where their every want
will be supplied.' Government orders at the present
day are issued in a more prosaic style, but the actually
accomplished facts are not unworthy of Abul Fazl's
lyric rapture, and he would be dull indeed whose
imagination was not kindled by the majestic volume
of water flowing down the Upper and Lower Ganges
canals. To the Englishman's mind the word 'canal'
usually suggests a narrow ditch, protected by bare
banks, thinly covered with grass. The Ganges canals,
however, resemble great rivers, adorned with fine
timber all along the banks.

In the United Provinces the State irrigation works
under the control of the Irrigation Department com-
prise five large and eleven smaller canals, and twelve
small storage works. The canals are all of the peren-
nial type — that is, their supplies are all taken in by
means of permanent, or in some cases of temporary,
dams constructed across the rivers from which they
are drawn. Of the five large canals, the Upper and
Lower Ganges, Agra, and Eastern Jamna are classed
as productive ; and one, the Betwa Canal, as protec-

CANALS 161

tive. The remaining works are all classed as minor
works, and for convenience of administration and
accounts they are grouped into separate systems,
known respectively as the Dun, Bijnor, and Rohil-
khand Canals, and the Jhansi and the Hamirpur Lakes,
the names of the latter indicating the districts in
which the storage works are situated. To this list
of Government works should also be added the
numerous small canals which have been constructed
in the Government estates of the Naini Tal district,
and which are known collectively as the Tarai and
Bhabar canals. These works are managed by an
engineer of the Irrigation Department whose services
have been lent to the estates, but the expenditure on
them is not shown in the departmental accounts.

Up to March 31, 1901, the capital expenditure which
had been incurred on all irrigation works under the
charge of the Public Works Department amounted
to 907 lakhs (£6,046,000). Taking the mean results
for the preceding six years, so as to include both wet,
dry, and normal years, the annual revenue derived
from the works which were in operation at the com-
mencement of the period amounts on an average to
88f lakhs, the working expenses to 29I lakhs, and the
net revenue to 59 lakhs, representing a return of
6*9 per cent, on the capital cost of the works, which
may be put at 853 lakhs. Taken as a whole, therefore,
the works yield a substantial profit to the State.

In a year of average rainfall the works irrigate
about 2,500,000 acres, but the area varies greatly from
year to year according to the nature of the seasons.
In 1894-95, with a good monsoon followed by good
winter rains, the total area barely exceeded 1,000,000
acres. On the other hand, in 1896-97, when over the
whole canal tract there was practically no rain after
August, the area rose to over 3,000,000 acres. In that
year the real protective value of the works was fully
demonstrated. Under conditions very similar to those

11

1 62 AGRICULTURAL CAPITAL

which led to such widespread cessation of agricultural
work throughout the greater part of the provinces,
the cultivators in the canal-irrigated tracts not only
secured their crops, but, owing to the high prices pre-
vailing, they were exceptionally prosperous. As soon
as their spring crops were assured, they were able to
export grain, and thus out of their plenty to contribute
to the wants of less fortunate tracts. The value of
the crops in that year raised by the works was esti-
mated at 13 crores of rupees (£8,666,000) a sum which
exceeded by 50 per cent, their total capital cost, while
1,500,000 tons of edible produce were rendered avail-
able as food for the people. The best testimony to
the protective value of the canals is afforded by the
following extract from the Lieutenant - Governor's
review of the Chief Engineer's report for the year.
Referring to the financial results of the year's opera-
tions, Sir Antony MacDonnell wrote :

1 These very satisfactory figures show the results of
the year's operations as gauged by the departmental
system of accounts, but taken alone they fail to repre-
sent the true value of the canals in a year of drought.
In a year such as that through which we have just
passed it is in the effective protection against famine
and scarcity afforded to almost the whole of the canal-
irrigated tract, in the suitable employment provided
for some millions of the people, in the exceptional
prosperity of large numbers of the cultivating classes,
and in the land revenue secured to the Government,
that the most important and the most beneficial results
of the canals are to be found. In these respects the
benefits derived from the canal works during the past
year of drought can hardly be exaggerated.'*

The value to the people engaged in agriculture of
capital expenditure upon irrigation becomes apparent
when we remember that the Upper and Lower Ganges

* ' Report of the Indian Irrigation Commission, 1901-03,' part ii.,
p. 184.

COST OF CANALS

163

Canals irrigate a tract of country which was particu-
larly exposed in the early years of the nineteenth
century to devastating famines. In the Northern
Doab, which we now look upon as a securely pros-
perous tract, no less than eleven famines occurred in
the period between 1800 and 1850. Of these, three
(1803, 1819, 1837) were widespread calamities, which
devastated large areas, and the remaining eight occa-
sioned acute misery in particular districts. The Doab
was indeed looked upon as a particularly precarious
tract of country before the capital invested in irriga-
tion had protected it against the chances of the
season.

The following tabular statement shows the financial
results of the four large canals of the productive class,
based on the average of the six years ending 1900-01.
The figures given for the Lower Ganges Canal do
not include those for the recently opened Fatehpur
branch.

AVERAGE OF SIX YEARS, 1895-96 TO 1900-01.

Name of Canal.

Canal

opened

in —

Total

Capital

Outlay to

End of Year.

Excess of
Annual

Net
Revenue

over
Interest
Charges.

Per-
centage
of Net
Revenue
on Capital.

Area
irrigated.

Excess of

Net Revenue

over Interest

Charges to

End of

1900-01.

Upper Ganges

Canal
Lower Ganges

Canal

Agra Canal ...
Eastern Jamna
Canal

Total ...

Year.
1854

1878

1874
1850

Rupees.
2,98,87,861

3.53»24,044
95.40,173
38,64,233

Rupees.
17,05,245

91,084

1,80,500

8,82,186

9"47

3*97
5-60

26-55

Acres.
948,977

774.137

228,739

285,987

Rupees.
1,27,58,990

-26,21,950

- 14,09,353
2,20,92,711

—

7,86,16,311

28,59,015

7"37

2,237,840

3,08,20,398

The financial results of these productive works are
thus seen to be highly satisfactory. These four canals
yield an annual net revenue of 58 lakhs (£386,666

11 — 2

1 64 AGRICULTURAL CAPITAL

sterling), equivalent to a return of 7*37 per cent, on
their capital cost, and after meeting interest charges,
which amount to Rs. 29,32,375, there is left a clear
profit to the State of Rs. 28,59,015 per annum.

It must not, however, be supposed that all irrigation
works have proved equally lucrative to the State. The
Betwa Canal was constructed as a protective and not
as a productive work, and it is conducted at a loss to
the State. A mean of the financial results for the six
years ending with 1900-01 shows that the average
gross annual revenue of Rs. 85,000 falls short of the
maintenance charges by Rs. 17,000; including interest
charges, there is an annual loss from this canal of
Rs. 1,81,000. The canal was opened in 1885, and in
the fourth year from its opening the irrigated area rose
to over 32,000 acres. That area was seldom and only
by a small amount exceeded until the drought of
1896-97, when 87,306 acres were recorded. In years
of ordinary rainfall the irrigated area still falls short
of 40,000 acres. The work has, therefore, not fulfilled
either in its financial or protective effects the expecta-
tions that were formed when the estimates were
framed. But though the protection afforded to the
Jalaun district during the drought was not complete,
the canal led to a sufficient reduction of distress and
of expenditure on relief to justify its construction.
In the words of Sir Antony MacDonnell, 'it was the
salvation of the Jalaun district.'

The three systems of minor canals, which were
referred to before, all irrigate in the submontane tract,
and are fed by streams which rise in or near the
lowest ranges of the Himalayas. Two of them, the
Dun and Bijnor Canals, are highly remunerative works,
returning y\ and i2-| per cent, respectively on their
capital cost. The Rohilkhand canals, which com-
mand a country generally less fertile and requiring
less artificial irrigation, return about 4 per cent, now
that the water-rates have lately been increased. Col-

MISCELLANEOUS IRRIGATION WORKS 165

lectively the small canals yield a net revenue of over
1 1 lakhs, or 5 J per cent., on a capital outlay of 27 lakhs
(;£ 180,000). On an average they irrigate 140,000
acres annually. In the drought of 1896-97 by
their aid the crops on 163,000 acres were brought
to maturity, against 64,000 in the famine of 1877-78.
This large increase is to be attributed chiefly to liberal
expenditure on improvements during the past twenty
years. To close the review of irrigation works con-
structed by the State, it is necessary to refer only to
the lakes in the Bundelkhand districts. The twelve
reservoirs in the Jhansi and Hamirpur districts are
the only works in the provinces under the charge of
the Public Works Department which are entirely
dependent upon storage. They are all old works
which were in existence before the districts came
under the British Government. About Rs. 80,000 has
been spent on improvements which have about doubled
the irrigated area, but even now they only irrigate
about 3,000 to 5,000 acres annually. The revenue in
the shape of water-rate and enhanced land revenue
barely suffices to cover the annual working expenses.
Such are the works of irrigation constructed by the
State in these provinces ; large as has been the capital
expenditure already incurred, the Irrigation Commis-
sioners, from whose report I have extracted most of
the facts and figures relating to irrigation, were of
opinion that there was still considerable scope for the
extension of State irrigation works ; and they made
certain definite proposals, and suggested others for
consideration, which need not be discussed here. It
is probable that no further investments of Government
capital will yield the same large returns as have been
realized upon the earlier undertakings, but that will
probably not be thought an insuperable objection to
undertaking them. The present tendency of economic
thought among Government servants is to give a wide
interpretation to the functions of the State ; most of

166 AGRICULTURAL CAPITAL

them have abandoned the old individualist doctrines
according to which only the strongest necessity and
the prospect of certain profit justified the State in
embarking upon enterprises of an industrial nature.
Nowadays a sympathetic consideration is extended
to projects from which the State cannot expect any
direct profits, and from which the only return will be
the improved prosperity of the people. It is possible
to argue that, by taking a large view of the revenues
of the State, these projects may be justified financially
as well as politically, for the prosperity of the people
is reflected in the revenues of the State. With regard
to both public and private enterprises, the opinion
now prevalent is the same ; that opinion is that the
capital for agricultural improvements should be ad-
vanced by the State.

In Europe the small farmers have been as much
hampered by want of capital as the cultivators of
India ; in recent years they have partially overcome
this difficulty by co-operation among themselves.
The earliest examples of co-operation in farming
were usually associations to secure loans on more
favourable terms than the local money-lender would
grant, but the farmers, who had discovered the ad-
vantages of association and had formed the habit of
working together for a common purpose, soon ex-
tended the scope of their activity and discovered that
they were able collectively to conduct a great many
farming operations well which they had individually
done ill. The benefits which spring from co-opera-
tion are of two kinds: (i) The stimulus to the
small farmer to invest his savings in farming, and the
discouragement of unproductive expenditure ; and
(2) the economic advantage of production on a
large scale, and the employment of adequate capital-
It is to this co-operative movement among the
peasants and small farmers that the agricultural re-
vival in Europe is due. Perhaps the most striking

CO-OPERATIVE DAIRIES 167

example of the success of co-operation is to be
found in Denmark. Half ruined by the Napoleonic
wars, Denmark was still further crippled by the
loss of her two fairest provinces in 1864; the sturdy
Danish peasants set to work to repair that loss by
reclaiming and bringing under cultivation the moor,
marsh and dune land of which the surface of Jutland
then so largely consisted. It was in the development
of the dairy industry that the Danes first found the
means of recovering from the crisis which had over-
taken their economic and especially their agricultural
conditions. The peasant-farmers of Denmark were in
those days extremely poor, and individually they were
not able to provide the capital necessary for scientific
dairying. Their prosperity dates from the time at
which they started co-operative dairies. ' The first
co-operative dairy was opened in West Jutland in
1882. Others followed, and to such extent has the
movement spread that to-day a co-operative dairy is
to be found in almost every parish. There are now
no fewer than 1,050 of such dairies in Denmark, with
148,000 members, owning 750,000 cows out of a
total of 1,067,000 milch cows in the country. In
1902 Denmark exported, mainly to Great Britain,
168,000,000 pounds of butter, 135,000,000 pounds of this
total representing home produce, and the remaining
33,000,000 pounds butter received from Sweden and
Russia. The total value of our (i.e., England's) imports
of butter from Denmark in 1902 was £9,302,000, as
compared with £8,950,000 in 1901 and £8,029,000 in
1900. The amount invested in the erection and equip-
ment of dairies is over £1,500,000. The practice usually
adopted is for about 150 farmers in a particular district
to raise, say, £1,200 by subscribing £8 (Rs. 120) each,
this sum being sufficient to provide a dairy which will
deal with the milk of 850 cows. . . . Next to the co-
operative creameries, and now, indeed, rivalling them
in importance, come the Danish co-operative bacon-

1 68 AGRICULTURAL CAPITAL

curing factories, the success of which has been, if
possible, even more rapid.'* There were in 1902
twenty-seven such co-operative factories, dealing with
777,232 pigs of the total value of £2,500,000. The
significance of these figures will be realized when
it is remembered that the population of Denmark is
2,200,000 — that is to say, not more than the population
of two good-sized Indian districts. Other branches
of co-operative agriculture which have been equally
successful in Denmark are connected with the egg
industry, with bee-keeping and the purchase of agri-
cultural machinery, manures, and feeding-stuffs. So
numerous and various are the co-operative societies
in Denmark that ' it is no unusual occurrence for a
Danish farmer to belong to ten local co-operative
societies besides other bodies formed for the advance-
ment of the agricultural interests of the country.'

A network of co-operative agricultural societies is
spreading over almost every country of Europe,t and
by association the small farmers are providing them-
selves with the use of capital which would be far
beyond the means of any of them individually. The
consequence has been to give an enormous impetus
to agriculture. The case of Belgium may be regarded
as typical. ' It was not until about the year 1890 that
Belgium began seriously to bestir herself with the
view of affecting the improvement, or rather the recon-
struction, of her agricultural position. Yet the claim
is made for her that, relatively to her size, more associa-
tions have been established in Belgium in the interests
of agriculture than in any other country in Europe;

* 'The Organization of Agriculture,' by E. A. Pratt : a fascinating
work which should be read by every Indian student, for it contains
invaluable lessons of what can be done by self-help to improve an
industry which is in most countries conducted, as in India, by men
with small holdings.

I England, in spite of the efforts of the Agricultural Organization
Society (Dacre House, Victoria Street, London, S.W.), still lags in
this respect behind the continent of Europe.

AGRICULTURAL CO-OPERATION 169

while as regards accomplished results, one authority
on the subject, M. Louis Varlez, says :

1 " The movement has hardly yet been outlined, and
already the agrarian crisis has moderated ; in some
parts of the country it has already come to an end.
We are taking part in a real awakening [un vrai reveil)
of agriculture. What will it be like when the move-
ment has developed its full proportions — when it shall
have spread throughout the entire country ?"
*****
' Of local agricultural leagues, formed by agricul-
turists " for the study and the defence of agricultural
interests," there were in Belgium at the end of 1901
no fewer than 776, with a membership of 42,659. The
action of these leagues is in some cases confined to
a single hamlet, while in others it may extend over
several communes ; but nearly all are affiliated to
some federation whose operations may embrace a
canton, a province, or the entire country. . . .

1 The primary object of the local societies is the
purchase in common of agricultural necessaries, this
being effected through central organizations, some of
which are represented by limited liability companies
formed by the agriculturists as an adjunct to their
ordinary associations. Of purchase societies the
number in 1901 was 780, with a total membership
of 49,000, and the purchases amounted to a total of
14,000,000 francs (84 lakhs). Some of the associations
procure costly agricultural machinery, which they let
out on hire to their members or others, the value of
the machinery thus held in 1901 being 98,000 francs
(Rs. 58,800). The equipment of co-operative dairies
is undertaken in certain instances, and the federations
operating in the dairy districts have organized a com-
plete system of inspection as to the working and
managing of the establishments belonging to their
members.

1 The raising of funds for the carrying on of agricul-

i;o AGRICULTURAL CAPITAL

tural operations, either by co-operative associations
or by individuals, has been facilitated by the estab-
lishment of rural credit banks of the Raiffeisen type.
Of these, there were in Belgium in 1894 only four, all
newly established. On December 31, 1901, there were
286 connected with six central banks created by the
different federations. The 286 societies represent a
membership of 13,000.'* The whole population of
Belgium, it should be remembered, is only 7,000,000.

It would be easy to multiply examples showing how
the small farmer of Europe is providing himself with
capital by means of association, and how this increased
application of capital has been the cause of a great
development of agriculture. But the application of
these examples to India is very remote. The co-
operative movement can hardly be said to have yet
begun in India. At present the Indian cultivator
does not see the desirability of the objects for which
European peasants usually associate. He has no
knowledge of chemical fertilizers, or of agricultural
machinery ; reasons of caste or religion would prevent
the majority of them from developing an industry in
eggs or bacon-curing. But most of all, he is ignorant
of the superior efficiency of co-operation in industrial
or commercial operations. When once the co-opera-
tive spirit has taken root, it is very probable that the
Indian villager will realize that he may develop the
trade in ghi (clarified butter) with great advantage to
himself. Pure ghi is difficult to get in Indian towns ;
it is for the most part scandalously adulterated by
means most offensive to high-caste Hindus. In the
manufacture of good ghi on co-operative principles,
there is an opening for co-operative dairying which
has in Europe often proved to be the beginning of
a far-reaching co-operative movement. But these
openings are not likely to be used until the Indian
cultivator has learned by experience the value of

* 'The Organization of Agriculture/ E. A. Pratt.

THE BEGINNING OF CO-OPERATION 171

association. This lesson he can only learn by finding
in association the remedy for the ills of which he is
already acutely conscious. It is, therefore, to co-
operative village banks that we must look to teach
the cultivator the virtue of co - operation. These
societies have often in Europe proved to be the
1 growing spot ' of agricultural reform, and it is re-
ported that Sir Horace Plunkett has declared that if
he had to begin his economic work in Ireland over
again, he would begin with village banks. In India
the ground is already prepared for the foundation of
small co-operative banks ; the villager is fully conscious
of his need for capital to buy bullocks or seed, and he
is painfully aware of the burden imposed upon him
by the village money-lender. If he can be got to
realize that by association he may borrow, not perhaps
as much as he wants, but as much as his fellow-
villagers think good for him, the foundation may be
laid of a genuine co-operative movement which will
easily extend to co-operative buying and the main-
tenance of co-operative industries. At present the
obstacles to this movement are not either legal or
economic, but moral, and the great virtue of the co-
operative movement is that it educates in thrift and
self-reliance at the same time as it provides the desired
capital. At the heart of every economic problem lies
a moral problem ; and the surest cure of economic evils
is one which gives the people the means of overcoming
their troubles themselves. The experience of Europe
seems to show that co-operative banks are such a means,
and there is, therefore, no nobler or more genuinely
patriotic work to be done in India than to teach the
people to organize village associations upon the prin-
ciple of mutual credit.

Before closing this chapter theoretical accuracy
demands that some reference should be made to one
other form in which capital has been sunk in perma-
nent improvements, and that is to the capital sunk

172 AGRICULTURAL CAPITAL

in roads and railways. Means of transport are an
indispensable condition to the development of agricul-
tural industry. Northern India is by nature very
poorly supplied with means of transport ; its rivers
will not compare with the Thames or the Rhine as
natural waterways. Before the nineteenth century
very little had been done by art to remedy this defect.
Even within the memory of men still living there was
but one metalled road in the northern districts of
these provinces, namely, the Grand Trunk Road,
which ran from Calcutta to Ambala, and thence, after
the conquest of the Panjab, to Peshawar. Away from
this single line of communication the ways were sandy
tracks, impassable in the rainy season, fetching great
loops to cross the rivers at practicable fords, or to
descend the ravines (nalas) at an easy incline. It
necessarily happened that the inhabitants of the
village had few communications with the rest of the
world. In a year of bountiful harvest the cultivator
could sell his surplus produce only in the overstocked
market of his village. Prices in that limited area
would run down as if they had no bottom ; when the
demands of the few non-cultivators were satisfied,
there was only the local grain-dealer to sell to, and
this single grain-dealer could make his own price
among a crowd of sellers. Moreover, it must be re-
membered that the village grain-dealer is a very small
capitalist, and that his grain -pits and purchasing-
capacity are very limited ; after his demand had been
satisfied there were no purchasers left. This restric-
tion of his market deprived the cultivator of a great
deal of the benefit of a good harvest, and he may often
have felt inclined, like Shakespeare's farmer, to ' hang
himself in the expectation of plenty.' The old reports
contain many references to the severe agricultural
depression which followed upon a succession of abun-
dant harvests, when grain was a perfect drug in the
market. As soon as metalled roads were constructed,

MEANS OF TRANSPORT 173

the villager with grain to dispose of carried it in his
cart to the neighbouring town or central mart, where
even before the construction of railways he could get
a better price for his produce than in his own village.
The metalled road relieved the cultivator from his
absolute dependence upon the local grain-dealer ; the
same relief has been afforded on a larger scale by the
railways, which have the effect of making the whole of
Northern India one market for grain. The cultivator's
produce has now a definite and, within certain limits,
a steady value. The reduction in the cost of carriage
has further enabled him to retain for himself a larger
proportion than before of the price at which grain
sells in the towns and central marts ; this is an
increase in the value of his produce which is quite
independent of the rise in price or value of grain in
terms of silver. The cultivator in the past probably
imported next to nothing from the world outside his
village, and to this day he imports very little ; but in
respect of what he does import he has been a gainer
by the reduction in the cost of carriage. He pays less
in actual cost (that is, in the articles he gives in ex-
change) for his copper and iron plates, foreign cloth,
lamps, and kerosine oil than he did, or would have
done, in the first half of the nineteenth century. But
though the improvement in the means of transport
has been a great stimulus to the development of
Indian agriculture, it is not necessary to make more
than this passing reference to it, because the construc-
tion of roads and railways falls within the ordinary
development of the country under a civilized govern-
ment, and roads and railways assist the production of
wealth in many other forms than agriculture.

CHAPTER VIII

THE DIVISION OF LABOUR, OR THE VILLAGE
ARTISAN

In countries in which communications are imperfectly
developed every village or small aggregation of men
must of necessity be self-sufficing — that is to say, the
men in each village must be able to satisfy their wants
themselves, as they are not in a position to import
from elsewhere. In words which have a direct ap-
plication to the economic conditions of India, Adam
Smith illustrated this statement by an example from
Scotland in his day : ' In the lone houses and very
small villages which are scattered about in so desert
a country as the Highlands of Scotland every farmer
must be butcher, baker, and brewer for his own
family. In such situations we can scarce expect to
find even a smith, a carpenter, or a mason within less
than twenty miles of another of the same trade. The
scattered families that live at eight or ten miles dis-
tance from the nearest of them must learn to perform
themselves a great number of little pieces of work for
which in more populous countries they would call in
the assistance of those workmen.' The type of society
described by Adam Smith still exists unimpaired in
the hilly districts of Kumaon, because in those moun-
tains one village may be cut off from another by snow
or floods for several months of the year; and there-
fore a community would be reduced to starvation
which depended for its subsistence upon the products

i74

SUBORDINATE INDUSTRIES 175

of its neighbours. It is only in mountainous or very
thinly-peopled countries that villages are completely
isolated ; but wherever the means of communication
are imperfect, it will be found that society distributes
itself in self-sufficing units. Until comparatively
recent years this was the condition of the villages in
these provinces. The natural waterways are few and
poor, and there were no metalled roads, and it was a
necessity of existence that every village should be so
constituted as to suffice for its own needs. While,
therefore, we may look upon every village as an
industrial unit engaged in extracting raw material
from the soil, we must remember that each of these
had to maintain a few petty and subordinate indus-
tries to supply the wants of the rural population.

These minor industries are directly subordinate to
agriculture, and as long as the village is self-sufficing,
they cannot be developed further than is needed to
minister to the simple wants of a community of
peasants. It is the possibility of exchange that gives
occasion to the division of labour, so the extent of this
division is limited by the extent of the possibility of
exchange, or, in other words, by the extent of the
market. Adam Smith's illustration of this is singu-
larly convincing.

1 It is impossible,' he said, ' that there should be
such a trade as even that of a nailer in the remote and
inland parts of the Highlands of Scotland. Such a
workman at the rate of 1,000 nails a day and 300 work-
ing days in the year will make 300,000 nails in the
year. But in such a situation it would be impossible
to dispose of 1,000 — that is, of one day's work in the
year.' The same holds true of the majority of villages
in India. The division of labour cannot be carried
beyond the limit fixed by the possibility of exchange,
and this limit for non- agricultural products is in-
evitably a narrow one as long as the village has so
little intercourse with the outside world. There is

176 THE DIVISION OF LABOUR

nothing abnormal or peculiar in this isolation and
consequent self-sufficiency of the Indian village ; on
the contrary, it was the universal characteristic of
village life, and the only organization of industry
possible in the absence of means of transport. We
find it at the beginning of the nineteenth century even
among the farmers of New England. ' They lived
mainly upon what they produced themselves, and
many of their exchanges were made without the in-
tervention of money. They swopped or bartered
services in the erection of their dwellings or in
harvesting ; they raised, spun, and wove their own
wool ; they packed their own pork ; they raised their
own corn, and paid for grinding it by a toll in kind ;
they cut their own fuel.'* The modern organization of
industry which has displaced this older one in Europe
and America owes its success to a more elaborate
division of labour. Nowadays, in Europe or America,
cloth is manufactured at a great mill in a town or dis-
trict wholly devoted to this industry, where an alert
business manager imports wool and cotton at the best
advantage, where production is carried on upon so
large a scale that the employment of steam-power
and complicated machinery is remunerative, and where
highly skilled workmen can be employed and can be
nicely graded to the different processes of manufac-
ture. In these conditions cotton or woollen cloth can
be produced so advantageously that even after the
cost of carriage has been paid it can be sold in remote
hamlets as cheaply as the product of the spinning-
wheel and the hand-loom. The farmer, therefore, finds
that it is most profitable to him to devote himself ex-
clusively to his own industry, and exchange his product
for town-made cloth. The same is true of other in-
dustries. The iron-master makes it his business to
find out the conditions in which his customer, the

* ' The Distribution of Products,' by Ed. Atkinson. G. P. Putnam
and Sons, New York, 1890.

SUBSIDIARY RECORDS 177

farmer, works ; he knows that the farmer cannot
repair complicated machinery himself, and that he
will not buy an implement which a slight accident
may make wholly useless to him. Agricultural
machinery is therefore all machine-made, with inter-
changeable parts ; and the American farmer far from
a manufacturing town can use a steam-plough or
reaping-machine with confidence, because he knows
that if an accident happens to any part of it he has
only to telegraph to the manufacturer the number of
the broken part, and he will receive the corresponding
part down by the next train.

These are examples of the extent to which the
division of labour can be carried where the means of
transport are highly developed. Each part of the
industrial world is dependent upon the rest, and that
dependence is increased by every further division of
labour. But in India the old distribution of industry
still prevails ; the self-sufficiency of the village has
been only slightly impaired, and the division of labour
is only carried a very small way. In addition to the
population directly engaged in agriculture, almost
every village possesses a blacksmith, a carpenter,
a potter, a barber, and a washerman ; and most
villages retain the services of some sort of holy man
{parohit or faqir), whose blessing upon the fields is
necessary for a successful harvest. In larger villages
there will also be found a weaver, a cotton-carder, an
oil-man {i.e., one who manufactures oil from oil-seeds),
perhaps a petty jeweller, and a small shopkeeper.
Strictly speaking, the grain-dealer who combines the
purchase and sale of grain with money-lending ought
also to be included in this category, but the part he
plays in the village economy is so important as to
have earned for him the distinction of a separate
chapter. Further than this, the division of labour
cannot be carried in so small a community, and much
of the labour which is in Europe and America assigned

12

178 THE DIVISION OF LABOUR

to a particular industry is in an Indian village per-
formed by women or by men at odd intervals of leisure.
Thus the grinding of corn and spinning of thread are
in Indian villages almost universally performed at
home, though the former at least has been for cen-
turies a separate industry in Europe.

The blacksmith and the carpenter follow industries
which are directly subsidiary to agriculture ; they
make and repair the ploughs, carts, and other simple
implements of Indian husbandry ; the potter supplies
domestic utensils, and the barber and washerman
perform services for the rural population which Indian
social habits have delegated to a particular class of the
community. There is nothing in their methods of
production which calls for particular comment ; it is
under the heading of Distribution rather than of
Production that the singularity of the Indian system
is to be found. The manner in which the services of
the artisans are paid brings out clearly their subordina-
tion to the staple industry, agriculture. The artisans
do not receive direct payment for each act of service,
but they are given at each harvest a specified measure
of grain as a remuneration for the services performed
throughout the year.

The amounts vary according to local custom ; from
the head of each agriculturist family the blacksmith
and carpenter generally receive from 10 to 15 seers of
grain at each harvest ; the washerman, barber and
potter receive from 5 to 10 seers. A carpenter (assisted
at his trade by the males of his family) may have work
connected with from twenty-five to fifty ploughs, and
upon each of these he will receive 20 or 30 seers
annually (i.e., 10 or 15 at each harvest). When
he has no agricultural implements to make or repair
on behalf of his village masters, he does ordinary
carpenter's work, and receives cash payment for
each job.

Mr. William Crooke gives the following excellent

WAGES OF ARTISANS 179

account of the manner in which the village artisans
are remunerated : *

' When the grain is threshed, the artisans and
menials get their perquisites. The man who does
blacksmith's and carpenter's work gets in this way
25 seers of grain per plough at each harvest, this being
given in barley mixed with grain or peas (bejhar) at
the spring, and maize or juar millet at the autumn
harvest. The chamdr (leather-curer), in consideration
of repairing the well water- bag, providing leather
straps and whips, and helping clean the grain,
similarly gets 20 seers at each harvest per plough.
The washerman gets the same. Many give the same
amount of grain to the kahar or bhisti, who keeps their
houses supplied with water during the year ; but
among the lower classes of cultivators or field-
labourers the women of the family have to do this
work themselves. Similarly, the potter (kumhar), in
consideration of providing earthen pots during the
year, gets 10 seers of grain per plough per harvest.
The local priest (kherapat), who lights the Holi fire
and looks after the village ghosts, gets 2\ seers per
plough at each harvest. So, too, beggars, and the
wandering faqir or Jogi, in whose round the villages
lie, get a handful or two according to the piety or
generosity of the owner. The light grain and sweep-
ings of the threshing-floor are the chamdr's privilege
in consideration of the help he gives in threshing
and winnowing. The meat of dead cattle also falls to
him, but he does not get the skin. If an animal dies,
the hide goes to the owner, and the chamdr expects
10 or 12 seers, of course, as the fee for curing it. In
some cases he is expected to mend shoes for nothing.
This is much better than the rule in the eastern dis-
tricts, where the chamdr can claim the hide, and has

* ' An Inquiry into the Economic Condition of the Agricultural
and Labouring Classes in the North-Western Provinces and Oudh,'
pp. 24, 25.

12 — 2

1 80 THE DIVISION OF LABOUR

thus a direct incentive to poison cattle. Now, these
are on the whole very liberal allowances, considering
the duties for which they are the recognised equivalent,
and are very highly valued, so much so that there is
great competition among such people for these privi-
leges. They are rigidly and punctually claimed ; the
right descends from father to son ; they greatly resent
the intrusion of strange families who might possibly
encroach upon their rights, and they strictly boycott a
man who withholds their perquisites. Nothing is more
ridiculous than to call such people drudges and slaves ;
on the contrary, they are a decided power in the rural
community. There can be no question but that they
have greatly improved in position, and become more
independent under British rule. Old Thakur land-
lords have often complained bitterly to me of the
insolence of this class, the fact being that they are no
longer inclined to submit to bullying and drudgery.
They know their rights, and are determined to assert
them.'

Those who believe that the economic conditions of
an Indian village are regulated by custom, and not by
competition, will find the most plausible support of
their theory in the remuneration paid to the village
artisans. It must be confessed that the scale of pay
which these persons receive is looked upon as per-
manently fixed, and is, in fact, very rarely altered.
But this alone does not justify the conclusion that
competition is wholly inoperative. All the world
over wages (or the price of services) vary much more
slowly than the price of commodities, and the wages
of an artisan (i) employed by a body of villagers, and
(2) receiving his wages in kind, must, naturally, of all
wages, be the most difficult to alter. Nor does it
necessarily follow that, because the rate of remunera-
tion remains nominally unaltered, a real change does
not take place under the stress of competition. In
recent years the employment open to carpenters,

WAGES OF ARTISANS 181

blacksmiths, and masons upon public works and in
the neighbourhood of towns has drawn many of them
away from the villages, and it is therefore to be pre-
sumed that the artisan who remains has more ploughs
to attend to, though his remuneration per plough has
not been increased. I am inclined to think that more
positive changes may at times take place. The village
would no doubt be scandalized at the idea of raising
the grain-wages of Bhopal, the carpenter ; but if Bhopal,
attracted by the high wages in the neighbouring town,
were to leave the village, his former employers might
not find it impossible to offer a higher rate to Phuran
to persuade him to fill the gap. Definite alterations,
too, have been made by the village elders, after some
great convulsion which disturbed rural economy.
Thus I find it recorded that the cultivators of Ferozpur
(in the Punjab) refused the sweepers the remuneration
they had received under the Sikhs, but that, as this
change was not in harmony with the economic condi-
tion of the time, the rate of payment for their other
services was gradually adjusted by mutual necessity.*
It must also be remembered that in the case of the
remuneration of the village artisans custom and com-
petition have not been seriously in conflict in the last
ioo years ; as their wages are paid in kind, the money
value of their remuneration has risen pari passu with
the rise in prices. Lastly, although these customary
wages appear so immutable, some alteration, though
not openly avowed, must have taken place, because it
is exactly persons of this class who are popularly sup-
posed to have most improved their condition in recent
years. ' The wages of certain classes of artisans,' said
Mr. Crooke in 1888, ' particularly masons, blacksmiths,
and carpenters, have gone up by leaps and bounds
since employment opened in public works. As far as
I can judge their pay has about doubled within the
last generation. And this rise of wages has been in

* 'Ferozpur District Settlement Report, 1877/ E. L. Brandreth.

i82 THE DIVISION OF LABOUR

some cases accompanied by a desire to claim a higher
social status than they hitherto enjoyed. Thus quite
recently the carpenters of the town of Jalesar held a
meeting, declared themselves to be Brahmans, assumed
the sacred thread, and indignantly refused to defile
themselves by repairing the municipal conservancy
carts — a class of work to which in former times they
never dreamed of objecting.'

Of the manner in which an Indian artisan lives I
can best give an idea by a description of individual
cases. Out of the many cases investigated by Mr.
Crooke I have selected three, who all followed the
same trade, that of carpenter. The details will be
found printed in the appendix to this chapter. I do
not think that the estimates of income and expendi-
ture can be accepted as trustworthy or complete,
because they were framed from the memory of rustics
who did not know how to read or write and kept no
accounts. The estimates do not represent any definite
idea in the minds of the carpenters, but the answers
elicited by the questions of the official who investigated
these cases. It is quite possible that a considerable
item of income or expenditure was forgotten, and
therefore the ' saving ' which is recorded as the result
of the year's operations is probably not deserving of
credit. But though the information may not be ex-
haustive, it probably is accurate as regards the facts
given, and the details regarding employment, food,
house, and clothing, are instructive and interesting.
The principal facts about these three men, whom I
have selected as representatives of the artisan class,
are clear. They have next to no capital invested in
their industry ; their labour is not specialized, for they
do all kinds of carpentering work, and eke out their
livelihood by following other callings as well. They
lead hard lives and have a diet of the coarser grains
only. On the other hand, the conditions in which
they live are probably more propitious to health than

INEFFICIENCY OF LABOUR 183

those in which a mechanic in a large European town
brings up his family. Their houses, though much
rougher, are larger and airier, and their food, though
coarse, is sufficient.

As regards the productiveness of their labour, how-
ever, there can be no comparison. They work in
conditions which make it impossible for them to create
value upon the same scale as European artisans. The
reason of this has already been indicated. The indus-
trial organization of Indian society does not permit of
the division of labour. The labour which is at pre-
sent expended by the blacksmiths and the carpenters
in these provinces would result in the production of
articles of much higher value if, instead of being
scattered about in numberless villages, they were
grouped in a few large centres and worked under the
direction of skilled managers. If they were so aggre-
gated, their operations would be on a scale that would
make the use of steam or electric power remunerative,
and each man could be put to that work which he is
best capable of performing. But even if society could
be reconstituted with a single eye to the production
of more wealth, it is not certain that the modern
organization of industry is yet possible in India.
There are serious obstacles to the success of large
factories in the present condition of the country. The
first of these is the still existing imperfection of the
means of communication. The industrial organization
of Europe or America is impossible without cheap and
rapid transit. Every producer must have easy access
to the great markets, and the great markets must be
able to redistribute the finished product to the con-
sumers, wherever situated. Those who exclaim against
the extension of railways in India ignore the impor-
tance of cheap communication in developing manu-
facturing industries. A second obstacle, which is a
consequence of the first, is the absence of distributing
agencies. A manufacturer in India who produced

1 84 THE DIVISION OF LABOUR

commodities which would have a ready sale among
the village population would encounter the greatest
difficulty in getting into touch with his customers.
The small shopkeepers that are to be found here and
there in the rural districts are almost as ignorant of
modern trade as the villagers themselves, and at
present the large merchants of the towns are content
to let their customers come to them and to cater for a
demand which has already manifested itself.* Those
who find it difficult to realize that a shopkeeper con-
tributes directly to the production of wealth may see
in India how much the absence of such a class hinders
production. The difficulty of reaching the masses
must act as a strong deterrent upon any manufacturer
who wishes to supply the wants of the masses, and
the creation of new wants is hindered by the difficulty
which the peasant has in learning of the existence of
new products.

I have said that the aggregation of artisans in large
centres would probably be followed by the introduc-
tion of steam-power in Indian industries, but I do
not wish it to be thought that the introduction of
steam-power is indispensable to the improvement of
Indian industry. On the contrary, I quite agree with
Mr. Havell, the Principal of the Government School
of Art in Calcutta, that a great improvement is possible
without recourse to steam-power, and that it might be
effected by the perfection of the instruments of manu-
facture driven by hand-power. The indigenous indus-
tries of India are for the most part conducted with
very rude appliances, such as were probably in use
2,000 years ago. Even before the introduction of

* It is a remarkable fact that the large Muhammadan firms in
Bombay which import cloth from Europe and do a very large
business have not got travellers going round to visit the cloth-
dealers of the interior, but are content to sit at Bombay to await
the arrival of their customers from the Punjab, Sind, and the
United Provinces.

STEAM-POWER AND HAND-POWER 185

steam the place of these appliances was taken in
Europe by more skilfully designed implements, and it
is contended that the outturn of the hand industries
of India might be very largely increased by adopting
these European improvements. It is not a law of
Nature that steam-power should supersede hand-
power ; it has been the consequence only of the special
conditions of Europe. Where the power required is
not in excess of that which can be supplied by the
human bod}', it is a calculation of the relative cost
which decides whether steam-power or hand-power
shall be applied to manufacture. Hand-power is ex-
pensive in the West of Europe, and manufacturers
therefore are constantly striving to replace it by steam-
power ; but in India at the present day hand-power
is cheap, and is generally more economical (to the
employer) than steam-power. This general argument
is corroborated by the fact that the hand industries of
India, though languishing under the stress of Euro-
pean competition, do still continue to exist. If, there-
fore, the efficiency of the hand-power industries in
India could be very considerably increased, it is prob-
able that they would be able to compete successfully
with the steam-power industries of Europe. A typical
illustration may be taken from the hand-weaving in-
dustry. The hand-loom of the Indian weaver is a
very clumsy affair, and in Europe it has been greatly
improved upon by certain mechanical contrivances,
the principal of which is the fly-shuttle, which has
been in use in Europe for over a century, and by the
use of which the efficiency of the hand-weaver in
England was increased threefold.* This simple con-

* Before the Commissioners appointed in 1837 to inquire into the
conditions of the hand-loom weavers of the United Kingdom, one
witness ascribed important results to ' the great and sudden rise of
wages (or earnings), due to the introduction of the fly-shuttle in
1789-90, by which a man could do three times as much work as
he did before. The cotton manufacture began about 1783 ; about

1 86 THE DIVISION OF LABOUR

trivance may be added to an Indian loom, and it will
add very largely to its efficiency. As the Indian
weaver acquires the skill necessary to use this device
he could be put in possession of more complicated
looms, which would still further increase his output.
Quite recently a Muhammadan gentleman of the Punjab,
Mr. Mohamad Shafi, introduced from Japan an im-
proved hand-loom, of which he taught the use to some
weavers in Lahore. Mr. Shafi told me that with the
ordinary Indian loom a weaver could weave 4 to 5
yards of cloth in a day, but that after he had been
learning the use of the new loom for three weeks, he
could weave on it 20 yards in a day of the same
number of hours. This is an increase of efficiency of
400 per cent., and even if we suppose that such an
increase of efficiency could not be general, there is
ample reason for thinking that the efficiency of the
hand-weaver might be increased 100 per cent., and
that with this increase he would be able to compete
with the factories of Europe.

It is a remarkable illustration of the unsuitability
of the Indian industrial organization for the rapid
development of wealth that the knowledge of this
improved hand-loom does not spread among the hand-
weavers of India. Mr. Havell tells us that 'in the
Madras Presidency he inspected thousands of native
hand-looms, and he never discovered a fly-shuttle
except in the Basel Mission weaving establishments
and a few other mission-schools ; the use of it never
seems to have spread among the weavers outside.'*
The illiteracy of the people is, of course, one of the

1788-89 was introduced the fly-shuttle, and in the year 1790-91 it
was almost universal. That increased a man's wages beyond all
proportion to any other trade. ' I had weavers myself,' the witness
continued, 'at that time who could have earned ^100 a year easily;
before the introduction of that very simple machine perhaps they
could not have earned ,£30 or ^35 a year.'
* Vide the Pioneer, August 10, 1901.

BEGINNINGS OF CAPITALISM 187

chief reasons wiry a knowledge of new industrial pro-
cesses does not spread quickly among them. In these
provinces only a little over 3 per cent, of the popula-
tion can read and write. In Europe an enormous
amount of technical information is diffused by means
of journals devoted to particular industries; new pro-
cesses and new products are thus constantly brought
to the notice of persons capable of making a practical
use of this knowledge. In India information cannot
be diffused in this way, and the adoption of new
methods is, in consequence, very slow. If the intro-
duction of new methods of production must depend
upon the gradual rise of the general level of education
among the masses, it is clear that Indian industry
must remain for a long while in its present condition.
It is because a capitalist organization of industry
adapts itself so much more readily to new require-
ments that capitalism tends to supersede that more
ancient organization in which the artisan is himself the
entrepreneur. Small capitalists, working in different
centres, might introduce this change in the methods
of production, which it is hopeless to expect the un-
educated artisan to initiate. It is quite within the
bounds of reasonable probability that a young Indian
who has received an English education up to the
B.A. standard, and who is in possession of a little
capital of Rs. 5,000 to Rs. 10,000 should invest his
ability and capital in the hand-weaving industry. He
would find that he was able to buy twenty or thirty
improved hand-looms (those which are made by Mr.
Shafi in imitation of his Japanese model cost Rs. 100
each); he would engage the same number of weavers,
whom he would have to teach the use of the new
loom. When they had acquired the dexterity neces-
sary to work it, he would have to give them wages
at the rate of about 4 annas a day, which is some-
what in excess of their earnings with the old-fashioned
loom. These weavers would be his servants, and the

188 THE DIVISION OF LABOUR

master would have to undertake all the risks of pro-
duction himself: he would provide the thread, the
looms, and other machinery required for setting up
the warp ; he would hire the room or factory in which
his men were to work, and pay wages which would
amount to Rs. 120 or Rs. 180 a month, according to
the number of looms he had in work. The master
would then have the task of selling the manufactured
cloth to the cloth-dealers in the nearest bazaar, and
the price which he would get, minus the sum of his
expenses, would represent his profit. According to
the calculations made by Mr. Havell, the profits would
amount to 8 annas a day on each loom — that is to say,
if the master had twenty looms going he would make
a profit of Rs. 10 a day or Rs. 240 in a month of
twenty-four working days. I think it very improb-
able that so high a rate of profit could be maintained,
as there are many items of expenditure to be con-
sidered, such as rent, interest on capital, etc., which
were not in the scope of Mr. Havell s inquiry. But
even if very large reductions are made on this score,
there is still left a very considerable profit, which
would probably represent a larger remuneration for
his energy than a young Indian could secure in other
walks of life. If once it can be demonstrated that the
direction of hand-weaving factories is as profitable an
occupation as forensic pleading or Government service,
there will be plenty of young men in Indian colleges
to enter this line of life, and under the direction of
these small capitalists the industry will be developed
and expanded to an extent and with a rapidity which
cannot be expected from the artisans themselves.

It is probable that the output of the textile industry
would be enormously increased by the introduction of
a system of small factories directed by capitalist em-
ployers ; but to the village weaver, with whom we are
here particularly concerned, this industrial revolution
could hardly be other than injurious. When once the

THE FIELD LABOURER 189

small factories had overcome the impediments to dis-
tribution, with which they are far better fitted to cope
than the English manufacturer in Lancashire, they
would oust the village weaver from his narrow market,
in virtue of the superiority of their industrial pro-
cesses and mechanical appliances, and to the indi-
vidual whose trade is taken from him it matters little
whether he is ruined by steam-power or a superior
handicraft. There is no reason to think that the
village weaver could maintain his position by adopt-
ing a modern loom or other mechanical improvements.
With a modern loom he would weave more cloth than
is needed in the restricted market for which he caters ;
he would be in the position of the nailer in the High-
lands of Scotland described by Adam Smith ; and so
we come round again to the fundamental obstacle to
improved industrial processes from which we first
started : the Indian organization of industry does not
allow of the efficient division of labour in non-agricul-
tural pursuits.

THE FIELD LABOURER

In Europe the labourers who work for wages under
an employer constitute the great bulk of the working
class, and the prosperity of millions of families depends
upon the proportion in which the product of industry
is shared between the employer and his labourers, or,
in other words, upon the rate of wages. In India the
great bulk of the labouring classes work on their own
account, and not for an employer, and the number of
those whose prosperity depends upon the rate of
wages is comparatively small. In the archetypical
Indian village, which we can only conjecture from
examples in which the type has been considerably
impaired, there probably was no place for the casual
labourer working for wages at the bidding of a chance
employer. The labour of the staple industry of the

190 THE DIVISION OF LABOUR

village — namely, agriculture — was provided by the
cultivators themselves, whether proprietors or tenants
of the land they tilled ; the subsidiary industries had
each one representative, who was supported by a joint
contribution from all the cultivators, and below these
two classes was a third, composed of the village
drudges, who performed the basest menial offices
of the village, and who received in return certain
inferior perquisites and privileges ; they were, in fact,
common serfs or slaves whom the village supported
jointly. These persons were always of the lowest
caste, and therefore their economic degradation had
in the eyes of the rural population a quasi-religious
sanction. But in modern times causes have been at
work which have given this class greater indepen-
dence. In the first place, being of low caste, these
men are willing to turn their hands to any task, and
have readily availed themselves of the chances of
employment opened upon public works and in the
towns, and have thus freed themselves from absolute
dependence upon their village masters. In the second
place, the class of casual labourers is constantly being
reinforced from the ranks of the cultivators. A culti-
vator who is compelled, either by the pressure of debt,
the failure of his crops, or ejectment from his holding,
to give up cultivation on his own account, must per-
force betake himself to field labour to make his liveli-
hood, and thus he joins the ranks of those who depend
upon daily wages. With the growth of population
and the rise of rents there is springing up in almost
every village a landless class, and as these persons
know no other industry than agriculture, they become
field labourers, working for wages.

The occasion for their services is found either where
the farmer, for social or caste reasons, does not work
himself in the fields, but only superintends, or where
his holding is too large to be worked by the unaided
labour of himself or his family. As a rule, the man

THE LABOURER'S WAGES 191

who cultivates with a single plough employs no
permanent labourer. If he is a low-caste man, such
as a chamar or a lodha, his own labour and that of
his family (his women having no objection to field-
work) are sufficient to work his farm. It is only at
special times — such as for weeding, irrigation, or
harvesting — that he emploj'S extra labour at all. But
a man who has a couple of ploughs and four oxen
must keep a hired labourer unless he happens to have
grown-up sons or other relations living with him and
partners in his holding. ' Such labourers,' wrote
Mr. Crooke in 1888, 'get wages at the rate of Rs. 3*
per mensem, which are paid by village custom, partly
in cash and partly in kind — a fact which is of vital
importance from the point of view of the labourer,
since the price of food grains has so largely increased.
The labourer, as a rule, takes in cash only the amount
he requires for his actual expenses, such as purchase
of clothes, etc. For casual labour the prevailing rates
are 6, 7, or, at the highest, 8 picet per diem for men;
5 pice for women, and 4 pice for boys and girls. The
harvest wages I shall describe later on. These
wages are almost invariably paid in grain at the
current village rate, which is generally as much as
10 per cent, cheaper than the market rate. The highest
rates are naturally given at those seasons when work
is pressing and there is a demand for labour, such as
weeding, irrigating, and harvesting. For digging,
manuring, and other work requiring manual strength,
the rates are always at the maximum. Only the

* 'An Inquiry into the Economic Condition of the Agricultural
and Labouring Classes in the North- Western Provinces and Oudh,'
1888, p. 23.

f A pice (a paisa) is a quarter of an anna, and therefore at the
present rate of exchange (Rs. 15 = ^1) is exactly equivalent to one
farthing. My own experience leads me to think that the wages of
the casual field labourer have risen since Mr. Crooke wrote the above
in 1888, and I should think that 8 to 10 paisa was the normal re-
muneration in the Northern Doab at the present day.

192 THE DIVISION OF LABOUR

strongest men are selected for such work, and seldom,
if ever, get less than the equivalent of 2 annas a day.
Reaping, however, is paid for in a different way.
During the day the owner of the field watches how
his labourers are working. In the evening he in-
variably gives each man three bundles of the cut crop,
but they are made smaller or larger according to his
merits.* The master by experience knows very
closely the equivalent of grain which each bundle
represents. The inferior class of workmen even can
usually make as much as i£ annas per diem. Those
who are most competent to express an opinion in such
matters believe that the remuneration of agricultural
labour has increased as much as 50 per cent, during
the last generation ; and there can, I think, be no doubt
that this class are on the whole much better off than
they used to be, and are on the whole perhaps in a
state of greater comfort than the lower stratum of
cultivators. The reason of this appears to be that
they are paid in a great measure in grain at cheap
village rates ; and as no bania will lend money to
such a man, they have escaped the incubus of debt.
Again, the opening up of the country and large public
works have done a great deal for the average labourer.
This year, for instance, thousands of them found
employment on the canal works at Nadrai, where the
Public Works Department have been recently dis-
tributing as much as half a lakh (Rs. 50,000) a month
in labour. Many, too, of this class have been em-
ployed by contractors in burning bricks or lime. On
the Nadrai works at present a good average labourer
can easily make as much as 3 annas per diem. During
my recent survey of the distressed villages on the
Kali Nadi and Burhganga, I found that a large pro-
portion of the able-bodied population was at work at

* An interesting illustration of the way in which, under the
influence of ordinary economic motives, the employer modifies
custom to suit his own interest, though preserving the letter.

IRREGULARITY OF EMPLOYMENT 193

Nadrai. An opening like this has given the field
labourer a chance of making his own terms with those
cultivators or landlords farming their own lands who
require labour.'

The field labourer suffers considerably from irregu-
larity of employment, a cause of distress with which
almost all European wage-earners are familiar. Agri-
cultural employment is from the nature of the industry
irregular. At certain seasons, such as the time of
harvest, there is a greater demand for labour than the
village can supply, and the field labourer can com-
mand relatively high wages ; but in the slack season
before the rains there is practically no work to be
done in the fields, and the field labourer is in conse-
quence unemployed for one or two months in every
year. On the whole, however, there is a consensus of
opinion that the casual labourer, partly owing to the
fact that he is little restricted in the matter of diet and
employment by caste regulations, is better off than
many small cultivators. The growth in the village of
an agrarian proletariat is a symptom which from the
experience of Europe we are disposed to watch with
anxiety, but the evidence at present forthcoming does
not point to any deterioration in this class of the
population. The opinions put forth by Mr. Rose on
this point in 1888 are worth quoting at length.*

1 I am inclined to think that day labourers and
servants are upon the whole in a far better position
than the less prosperous sections of the agricultural
community. Their resources are far more numerous
than those of the classes who occupy a higher position
in the social scale. 1 am referring here only to day
labourers and servants. I am not at all so sure that
artisans — weavers, for instance — occupy so favourable
a position. But with reference to day labourers and
servants, so long as they maintain their bodily

* ' Inquiry into the Economic Condition,' etc. — evidence of
E. Rose, Esq., p. 137.

13

i94 THE DIVISION OF LABOUR

strength, there is seldom want of employment ; and
among this class of the people there is again this
essential safeguard against the consequence of illness
and misfortune — that every pair of hands in the family
which is fit for labour finds something to do. There
are no idle hands ; even the mere children of the
family do something now and again to increase its
resources.

' To take as representative of the class the ordinary
village chamar : there is seldom any part of the year
in which employment is not provided for him. He is
employed as ploughman for five months of the year —
from Asarh to Kartik (June to November). He and
his family are employed as reapers in the month of
Aghan (November-December). He utilizes his time
in kutcha building and other forms of earthwork
{matkam) during the months of Pons and Magh
(January and February). In Phagun and Chait
(March and April) come the reaping of the rabi
(spring) harvest, and for the remainder of the year
until his round as ploughman comes again in Asarh,
he is engaged in marriage processions and otherwise,
and is well paid for it. His wages as a ploughman
are good, consisting of daily bani, which varies from
i| to 2 seers of rabi grains or pulse (kalewa) at midday,
which represents § seer of sattu, and for fifteen days
during seed-time he will get an additional allowance
of i seer a day as nbarwa. During this time the
women and children are not idle ; they are employed
in weeding (so/iani), for which each gets i seer of
grain at the least, and sometimes something more in
the shape of an extra allowance. In reaping-time all
hands are employed at the remuneration of one good
bundle for the labourer after sixteen small bundles
have been gathered for the master he works for. The
women and children work as well as the men. When
earthwork is going on, the remuneration of an able-
bodied man is 2 seers of grain and \ seer of sattu,

THE CHAMAR 195

with an additional handful of grain to start with in the
morning. Here again the wife and children are em-
ployed, and earn sufficient for their maintenance. The
boys of the family, moreover, accompany their father
in one or other of the many wedding processions
which are passing from place to place during the
months of Phagun and Chait, carrying flags or
rendering some similar service, for which they receive
as remuneration their daily food. Over and above
these many resources, the wife will probably act as
a midwife in the village, and receive the food while in
attendance on her patient ; and if the birth is that of a
firstborn child, she will receive a new sari and other-
wise a present, which is usually one of 4 annas in
cash. Besides this, the chamar (leather currier) re-
ceives the carcasses of the dead cattle of the zemindar
for whom he works. The flesh will probably be
eaten, the hide tanned, and a pair of shoes made for
the zemindar, for which he will give in return 2| seers
of grain, while the remainder of the hide will be made
into shoes to be sold for the chamar s benefit.* In
cases of illness the zemindar will probably find it to
his interest to contribute to the support of his chamar ;
for the competition as a rule is amongst the zemindars
for ploughmen, not among the ploughmen for zemin-
dars. The chamar lives fairly well, taking his grain
in the morning, his sattn at noon, and his regular meal
at night. He receives old blankets from the zemindar,
and will sometimes get a present of something of the
kind at a marriage feast, and he and his family are
upon the whole well clothed and well fed. This
picture of the chamar and his surroundings is prob-
ably a favourable one, but it is not exaggerated. It
is taken almost word for word from my notes of actual
inquiries ; but there are, of course, many instances in
which the labouring classes are less favourably placed

* Mr. Rose is writing from Ghazipur, one of the eastern districts
{vide Mr. William Crooke's evidence in the same volume, p. 24).

13—2

i96 THE DIVISION OF LABOUR

than the chamar of my description. What I have said
of the chamar will apply with little variation to most
other classes who live by daily labour and service.
The ahir is very often better off than the chamar if
he has paid off the advances taken for his cows and
buffaloes, and the bind, dosadh, and other inferior
castes may, so far as their material circumstances
are concerned, be placed in the same category.'

In order to correct the somewhat too favourable
impression which Mr. Rose has given of the condition
of the field labourer, I transcribe a detailed account
given by Mr. Crooke of a particular individual in this
position, who was recognised to be in distress, and
who may, therefore, be taken to represent the pauper
class of an Indian village.

1 Tijana, chamar, resident of Amirpur, one of the
depressed villages which has been injured by inunda-
tion and soakage in the lowlands of the Kali Nadi
River.

'Family. — He is forty years of years, and his family
consists of four persons : his wife and himself, a
daughter ten years old, and a son of five.

1 Wages. — He lives by labour, which brings him in an
average of Rs. 2 4 annas per mensem. He is employed
at present by one of the co-sharers in the village. He
gets this occasionally in cash and occasionally in grain
at current rates, as suits him and his employer. His
wife does nothing, except occasionally picking a little
vegetables, etc., for pottage.

' Property. — He has no live stock and no available
assets on which anyone would lend him money. His
house consists of a small mud enclosure, with a bad-
thatched hut, open in front, 12 feet long by 6 feet
broad. This contains practically no furniture, except
two old cots. He has only one blanket and a bundle
of old rags, which serve as bedding. He has a brass
drinking vessel {lota), worth 8 annas, one cup (katori),
worth 12 annas, one wooden platter, and one earthen

AN INDIAN PAUPER 197

pot. He has no store of grain or firewood. His
children pick up cow-dung* and roots of millet, for
cooking purposes.

1 Food. — He considers that his full ration would be
2\ pucka seers of grain or about 3J Government seers.
Yesterday he had cooked in his house 1^ seers of
barley, eked out with vegetables. Some days he gets
only 1 seer and sometimes \\ seers. A large part of
his diet consists of whatever vegetables — such as
leaves of gram, mustard, etc. — which his wife and
children can pick up in the fields. His rule is to mix
from 2 to 4 chittacks of flour in about 2\ seers of
vegetables. These are all boiled down into a mess
and eaten hot, with the balance of the flour made into
bread.

1 Debt. — He is not in debt, a fact which he explains
by saying that no one would be fool enough to lend
him grain or money.

1 General Remarks. — This man is admittedly the
poorest in the village. He makes no particular com-
plaint except of the cold, which forces him to get up
in the small hours of the morning and warm himself
over a fire of rubbish. But he and his children look
fairly nourished, and present no particular physical
signs of destitution.'!

It is impossible to draw a sharp line of division
between the field labourer, who lives on wages, and
whose economic position corresponds exactly with
that of the English agricultural labourer, and the
village servant, who is conceived by Hindu tradition
as being in the joint service of the whole village, and
who therefore occupies, on a lower scale, the same
sort of position as the village artisan. The casual

* This must not be considered to imply exceptional poverty, as
dry cow-dung is the commonest fuel in this part of India.

t ' Inquiry into the Economic Condition of the Agricultural and
Labouring Classes in the North-Western Provinces and Oudh/
1888, p. 87.

198 THE DIVISION OF LABOUR

labourer and the village servant inevitably blend one
into the other, because the village drudge must at all
times have been ready to do the extra jobs, for which
he got direct payment ; and, in the press of harvest
work, it must always have been the interest of a culti-
vator with a good crop to make small direct payments
to get it garnered. But these payments were looked
upon as subsidiary and accidental additions to his
regular salary, if so grandiose a term may be applied
to the humble perquisites which the lowly chamar
inherited. The artisan, the casual labourer, and the
village servants are all placed in the same category,
because they are all looked upon as employed by the
village, and they are for that reason all included here
in the same chapter.

APPENDIX TO CHAPTER VIII

The following notes are taken from the ' Inquiry into the
Economic Condition of the Agricultural and Labouring Classes
of the North-Western Provinces and Oudh,' 1888, and from part
of the evidence submitted by Mr. William Crooke. It is clear,
however (from the English), that the notes were not prepared
by Mr. William Crooke himself, but by an Indian official, pro-
bably a Deputy Collector or Tehsildar. This officer made personal
inquiries in the village, and submitted his notes to Mr. Crooke,
who appears to have embodied them without alteration into his
evidence. Their value is probably enhanced by the fact that
they represent the evidence taken by an Indian and not by an
Englishman. I have transcribed the notes without alteration.
I. Tahsil Kasganj, Mauza Manotar; family of Bhopal ;
carpenter ; aged thirty years.

(1) Occupation. — The two male members of the family live
by their own trade.

(2) Earnings. — They chiefly occupy themselves in making
agricultural implements ; have work connected with twenty-
four ploughs, nineteen of his village and five of Mauza
Mubarikpur. They receive no cash payment on account of
their wages. Get 30 seers of grain per plough per annum,
15 seers at each harvest — namely, in Baisakh (May) and Katik
(November). This grain consists generally of moth, bajra,
barley, bejhar, gram, and a small quantity of wheat. Thus
for twenty-four ploughs they receive 18 maunds of grain,
estimated to be of the value of Rs. 27. This plough-work
occupies them for six months in the year — viz., from Asadh to
Agahan (July to December). However, last year during this
period they also prepared four sugar-cane mills, which brought
them Rs. 8 (Rs. 2 for each). During the remaining half of the
year they do ordinary carpenter's work, getting for both 4
annas per diem ; thus their income for these latter six months
amounts to Rs. 45/10.

(3) Income and Expenditure. — Their income and expenditure
are as follows :

Income.

Rs. a. p.

Value of grain earned in wages from cultivators 27 0 0
Ditto, sugar-cane mills prepared ... ... 800

Wages in cash for ordinary carpenter's work ... 45 o o

80 o o
199

200

APPENDIX TO CHAPTER VIII

Rs.

a.

p.

42

8

0

IO

6

0

I

0

0

6

2

0

60

0

0

Expenses.
Diet expenses
Clothing expenses ...
Wages to barber and washerman
Purchasing articles of household furniture

Thus, deducting their expenditure from their income, they
appear to make an annual saving of Rs. 20.

(4) Cattle. — They have a calf worth Rs. 2.

(5) Tools of Trade. — Five tools of their trade are valued at
Rs. 3 9 annas.

(6) Household Furniture. — Their household furniture is of the
ordinary kind, and is valued at Rs. 19 14 annas.

(7) Food. — Their food consists of maize, bajra, and masina
in the winter season, and of barley, bejhar, gram, and a little
quantity of wheat in the summer and rainy seasons. Wheat
is specially used at festivals and in foods for guests. They eat
pulse of all kinds, and for vegetables radishes and fcenugreek,
and occasionally potatoes and ghuiyans. Their average diet
expenses amount to 1 anna 9 pies per diem, or Rs. 42/8 per
annum. Whatever quantity of grain they require in addition
to that received by them in wages from the cultivators they
purchase from the market.

(8) Their house is a kucha* one, valued at Rs. 5. A rough
plan of it is as below.

West

South

North

(9) There are no boys or girls to be married. A boy's
marriage cost Rs. 20 and a girl's Rs. 15. Some six guests
collect at the marriage for three days.

* That is, made of mud or sun-dried bricks.

THE CARPENTER 201

(10) Clothing. — Their clothing expenses are estimated to be
Rs. 10 6 annas — Rs. 5 6 annas for men and Rs. 5 for women
— using one-third English and two-thirds country cloth in their
clothes.

(n) General Remarks. — Cotton-thread is not manufactured at
home. They have no animal in milk.

II. Tahsil Kasganj, Mauza Abhaipura ; family of Baley ;
carpenter ; age forty years.

(1) Occupation. — Two of the members of his family follow
their trade, but occasionally cultivate, as do the other
members.

(2) Wages. — As carpenters they chiefly occupy themselves
in making agricultural implements. They work on forty
ploughs of their own village, ten of Mauza Allipur, and four
of Nagla Pokhni, total fifty-four ; and for their wages they
receive 20 seers of grain of low quality (such as gram, barley,
arhar, masina, etc.) per plough. This 20 seers of grain they
get in three portions — 1£ seers at the time of the sowing of
crops, 6f and 12 seers respectively when kharif and rabi crops
are reaped. For ordinary carpenter's work, which they do
only when they have no agricultural implement to make or
repair, they get 3 annas per diem.

(3) Cultivating Holding. — The area under cultivation of the
cultivating members of the family is as follows :

Name of Mauza.

Abhaipura
Jatan Asogpur ...

(4) Crops. — Last year their kharif and rabi crops were as
detailed below :

Area.

Rent.

A. r. p.

5 2 20 .,

Rs. a. p.
,. 12 8 0

600.,

,. II O O

Kharif.

Name of Crop.

Mauza Abhaipura —
Cotton

Bajra and masina
Maize
Bajra

Area under
Crop.

Estimated
Outturn.

Estimated Value
of the Outturn.

Bighas.
.. I

Biswas.
I ...

Mds.
I

s.
20 .

Rs. a. p.
600

2
.. O

15 ...
12 ...

3
2

IO .
20 .

500
..280

.. 2

13 »•

3

O .

..500

Mauza Jatan Asogpur —

Bajra and masina ... 2 12 ... 5 25 ... 900

Total of kharif crops 9 13 15 35 27 8 o

202

APPENDIX TO CHAPTER VIII

Mauza Abhaipura —
Barley and peas

Mauza Jatan Asogpur —
Wheat and gram
Gram

Total of rabi crops .

Rabi.

Rs. a.

p-

O 12 .

• 3

0 .

.. 4 8

0

5 5-

• 3i

20 .

• 47 4

0

30..

. 22

20 .

. 28 6

0

8 5

54

0

75 10
80 2

0

8 17

57

0

0

Grand totals-
crops ...

-viz., of both kharif and rabi

107 10 o

(5) Income and Expenditure. — Their income and expenditure
are as follows :

Income.
Produce of land

Wages for working on fifty-four ploughs at the
rate of 20 seers of grain per plough — viz.,
27 maunds, estimated value
Wages for doing ordinary carpenter's work
Sale proceeds of home-manufactured ghi
Sale proceeds of home - manufactured cotton-
thread

Rs.

a.

P-

107

IO

O

40

8

O

25

O

O

32

O

O

8

O

O

Expenses.
Diet expenses —

Wheat, 2 maunds

Other grain, 52 maunds — viz., of lower

quality... ... ... ... 78

Pulse, vegetables, spices, tobacco, etc

Clothing expenses ...

Cost of feeding animals

Rent

Repayment of loan ...

Purchasing household furniture

Cost of seed grain for rabi crops

213

400

0 0

0 0

94

0

0

33

15

0

12

0

0

23

8

0

...

10

0

0

5

0

0

...

11

14

0

190 5 o

Thus they are able to spare Rs. 22 13 annas per annum after
defraying their expenses.

(6) Debt. — This family is in debt amounting to Rs. 50, con-
tracted during the last four years. They now pay annually
Rs. 10 in liquidation of this debt ; the rate of interest on their
debt is Rs. 2 per cent, per mensem.

THE CARPENTER 203

(7) Family. — There are four adults, two women, three boys,
and one girl in this family. One girl has separated — i.e., has
gone to her husband after marriage. No male of the family
has separated.

(8) Agricultural Implements. — Their agricultural implements
are of the usual kind, and are of the value of Rs. 15 10 annas.

(9) Agricultural Stock. — Their cattle consist of two bullocks,
worth Rs. 30 ; one buffalo, worth Rs. 25.

(10) Household Furniture. — Their household furniture is
ordinary, and of the estimated value of Rs. 57 14 annas.

(11) Tools of Trade. — Nine tools of their trade are valued at
Rs. 15 14 annas.

(12) Rent. — No arrears.

(13) Food. — Their food consists of the following articles in
the different seasons :

Winter. — Flour of juar, bajra, masina and maize, urd and

mung pulse; and for vegetables, fcenugreek, sarson,

and chana vegetables and potatoes.
Summer and Rainy. — Flour of bijhar, gurchani (wheat and

gram), arhar, dal ; and for vegetables, kakris,

baigans, kaddu, and ghuinyan.

Their daily consumption of grain is 6 seers, estimated to
cost 4 annas 1 pie, or Rs. 94 per annum. The produce of
their land suffices for their consumption for the whole year.
They have, of course, to purchase from the market spices,
sugar, tobacco, etc.

(14) Seed Grain. — They are able to save seed grain for the
kharif sowings, and in some proportion for the rabi too ; for
the latter they have generally to borrow Rs. 10 worth of grain
from the mahajan (money-lender), on interest of 3 annas per
rupee for every half-year. As soon as the rabi crops are
reaped they repay this debt. At the times of contracting and
repaying the debt the value of grain is calculated only at the
current price rates.*

* That is to say, that the money-lender is not able to squeeze this
man in the way which he practises on some less fortunate, which is
by lending them grain at i seer dearer than the market rate, and
calculating their payments at i seer per rupee less than the current
price. Cf. in the same work the case of Newal Singh, a Chauhan
Thakur, on p. 57 — he ' has to borrow from the mahajan, having had
to pay interest of 2 annas per rupee for every half-year, and in
calculating the value of grain, to allow a reduction of 1 seer in
current price rate at the time of borrowing, and an increase of
1 seer at repaying.'

204

APPENDIX TO CHAPTER VIII

(15) House. — Their house is a kucha one. Its rough plan is
shown below :

12 Yards

eYds

3Y«S

3Yd-a

Room
3YdJ

_6 Yds
3Yds

Th

res

6 Yd-S
Room

6 Yis

Yard

hold*

4 yds

3Yds

3Yds

4yds

4Yd.s

3Yd*

8Yd*
3'i Yis 3% Yd.s

1 \3&Yi*\ I 3%Yd.8

l6Yd.s

yds

Room

/J

t^o

(16) Marriage. — One boy and one girl have been married,
and three boys and one girl are still to be married. A marriage
costs Rs. 60, and some sixty or seventy guests collect at the
marriage for three days.

(17) Clothing. — Their clothing expenses are Rs. 314 annas
per annum, of which Rs. 23 14 annas is for the men, and
Rs. 7 6 annas for the women. These clothes consist of one-
third English and two-thirds country cloth. One set of
clothes, which they keep to be used at marriages, fairs,
festivals, etc., is specially prepared of English cloth.

(18) General Remarks. — About 10 seers of cotton thread is
manufactured at home. Of this 10 seers of thread they get
cloth prepared for their consumption. They have to pay
5 annas 6 pie per 20 yards cloth weaved on account of
weaving wages. Twenty yards of cloth consume 1} seers
of thread. Thus 160 yards cloth, estimated to value at Rs. 8,
is prepared out of their 10 seers of thread on payment of
Rs. 211 annas on account of weaving wages. They have one

THE CARPENTER 205

animal in milk, prepare butter out of the milk, and sell it.
The quantity of ghi prepared in a year is 1 maund and 24 seers,
estimated to value Rs. 32.

III. Mauza Jorsimi, Tahsil Etah ; family of Pancham ; car-
penter ; aged eighty years.

(1) Income and Expenses. — Pancham, carpenter, chiefly occu-
pies himself in making agricultural implements ; he also does
ordinary carpenter's work. He gets as his wages from culti-
vators 15 seers of grain per plough in each harvest, making
an estimated income of Rs. 50 per annum from this source.
His wages from other work — viz., repairing wheels, sugar-cane
mills, etc. — amount to Rs. 53 8 annas a year ; thus his total
estimated income is Rs. 106 8 annas. His expenses are:

Rs. a. p.

Diet expenses at the rate of 4 annas per diem ... 90 o o
Clothing expenses : Rs. 6 in clothing for women,
all of country cloth ; and Rs. 6 for men, of
both English and country cloth ... ... 12 o o

(2) Family. — Pancham's family consists of two adult males,
two females, and two girls.

(3) Marriage Expenses. — Neither of the two girls has as yet
been married. A marriage costs Rs. 100; sixty or seventy
guests collect.

(4) Debt. — He owes Rs. 70 on account of debt contracted
during the last eight years. He had about nine years ago
some land under cultivation, and borrowed the above sum for
cultivating expenses, with the hope of repaying from its pro-
duce, which, however, failed totally, and therefore he could
not pay it. He now pays yearly the interest for his debt, with-
out much hope of repaying the principal.

(5) Household Furniture and Tools. — Pancham's household
furniture and tools are as follows :

Two lotas ...

One brazen plate

One cup

One batua (a cooking-vessel)

One iron spoon

One pan

One wooden dish

One grinding-stone ...

Fourteen tools used in his trade

worth

Rs.

a.

p-

I

8

0

I

6

0

O

2

0

I

0

0

O

1

0

O

1

6

O

2

0

I

0

0

14

0

0

206 APPENDIX TO CHAPTER VIII

Pancham has a kutcha house, 15 by 24^ yards. Inside it
are two rooms, 4 by 2^ yards each, with a thatch in the front,
and one anteroom, 6 by i\ yards. Near the outer door of the
house is a room 5 by 2J yards, with a thatch in front. In the
last-mentioned room Pancham works at his trade.

The three examples which I have here given are all of men
who followed the calling of carpenters. It is obvious, however,
that prosperity has been different in different callings. The
blacksmith and the carpenter have suffered but little from the
competition of European goods, and they have probably con-
siderably improved their position in the last fifty years. But
during the same period the weaver has been suffering the
reverse fate, and though weavers are not so numerous as
carpenters in the villages, nor so essential a part of village
economy, I might produce an incorrect impression if I did not
include in this Appendix one representative of the class who
are following moribund callings. The following extract from
Mr. Rose's evidence deals with this question :*

' The carpenter and blacksmith receive their remuneration
at each harvest ; and, while far from a position of anything
which approaches affluence, they do not, except in times of
scarcity, probably suffer at all from an inadequate supply of
food. But there is one class of artisan which, as it seemed
to me in the course of my inquiry, probably more nearly
approached than any other the position in which the sufficiency
of daily food becomes a question of uncertainty. These are
the weavers and, in a less degree, the cotton-carders, whether
Hindu or Muhammadan. In the villages the weaver seldom
uses his own cotton : the cotton is supplied by his employer,
and he is paid at the rate of an anna for 5 yards, this
quantity representing a day's work. The cotton-carder is in
much the same position. He gets i\ pucka seers of grain for
the carding of cotton for a razai, and i£ seers for the carding
of the cotton required for a mivzai or angarkha. With hard
work he can card cotton for two razais in one day, the wage
of which is 5 seers of grain ; but work of this kind is not
continuous. The position of a cotton-carder will very much
depend upon the number of persons in the household who are
employed in the work and the continuity of the employment.
Upon the whole, his position is very much better than that of
the weaver. As an instance of the straitened circumstances in
which persons of the latter class are sometimes to be found,
I will take the case of Raza, jolaha, of Usia. This man is
seventy years of age. His wife and two married sons, with
their wives and three small children, are included in the family ;

* ' Economic Inquiry,' p. 138.

THE WEAVER 207

but one of the sons left for Calcutta about three months ago in
search of work, and since his departure has not been heard of.
Raza has no land, and is entirely dependent on the proceeds
of his weaving. He and his wife are, however, too old to
weave, and the second son cannot do more than 5 yards
of cloth daily. There is nothing to supplement this beyond
the little which the women get when they are employed in
harvesting. I question whether such a family as this does not
often know what the meaning of a fast is, and whether their
daily meal is so regular and sufficient as it should be. A few
such families could undoubtedly be found in every populous
village, but they are not representative of the condition of any
great proportion of their class. Raza, the head of the family,
told me that fifty years ago he was far better off than he is
now, and that the consumption of country cloth had much
diminished of late years in consequence of the import of
European goods. This is undoubtedly true, and is one cause
why the weaver has, to a great extent, found his occupation
gone.'

CHAPTER IX

THE DIRECTION OF INDUSTRY: THE CULTIVATOR

If one may apply a European word to very dissimilar
conditions in Asia, the Indian cultivator, whether
peasant proprietor or tenant, is the entrepreneur who
undertakes the risks of production ; it is he who in his
humble way puts the agents of production into opera-
tion. In Europe the word is usually applied to a man
with ample credit who possesses in part and borrows
in part the capital needed for his large industrial
enterprises ; who employs workmen, and directs their
labour to the production of particular forms of wealth.
It is the entrepreneur's final task to find a market for
the finished wares which he has undertaken the risk
of producing. When he has paid wages to his work-
men, and interest to the capitalist, and rent to the
landlord for the land in which his factory and ware-
houses stand, the difference between the sale price of
his wares and these aggregate expenses represents
his profits. If he fails to sell his wares well, or if his
expenses of production have been greater than he
anticipated, he may make no profit at all. On the
other hand, he may make very large profits by
judiciously directing industry to the production of
those wares which command a high price, or by
reducing the expenses of production, so that he is
able to sell at the normal price and yet make unusual
profits. The essence of the entrepreneur's function is

208

THE CULTIVATOR AS ENTREPRENEUR 209

that he undertakes a risk, that he sets the forces of
production in motion for a speculative reward. The
entrepreneur calculates, often unconsciously, that he
will be able to sell the finished product at a price
higher than it cost him to produce it ; but even in the
best-framed calculations there is a margin of un-
certainty, an element of chance, which cannot be alto-
gether eliminated, and it is this which distinguishes
profits from the comparative certainty of rent, interest
and wages.

In all essentials the Indian cultivator performs the
functions of an entrepreneur, and the European word
seems misapplied to him only because he is generally
working on a very small scale, and because, instead of
directing gangs of workmen, it is he and his family
who provide the labour needed for production ; but
his remuneration, like that of the entrepreneur in
manufacture, consists of the gross product of industry,
diminished by the payments which he has to make for
the use of land and capital. We have seen in previous
chapters how the landlord and the money-lender have
used their position of economic advantage to appro-
priate to themselves the increment in the value of the
cultivator's product, and that they have been able to
exploit him, so that his efforts to improve his con-
dition turn to their benefit. The acquisition of occu-
pancy rights and the remedial measures directed
against usury may put the cultivator in a position to
resist the exactions of the landlord and the money-
lender, and place him in circumstances in which his
economic prosperity will depend directly upon his
own exertions. The Government of India has not
accepted the principle of laissez /aire, and has obviously
no intention of allowing the cultivator to become the
victim of existing economic forces, and the important
question to consider is whether the industrial methods
of the cultivator are such as to yield him an abundant
livelihood if the deductions made for rent and interest

14

210 THE DIRECTION OF INDUSTRY

are reduced to reasonable proportions. The entre-
preneur's profits depend upon the relation between
the expenses of production and the value of the final
product. The quantity and quality of the produce
raised from a given patch of land obviously depend
upon the intelligence and industry of the agriculturist,
and an estimate of the Indian cultivator's agricultural
efficiency is necessary to enable us to determine
whether, when freed from the pressure of adverse
economic conditions, he will be able to procure for
himself an abundant livelihood, and surround himself
with the opportunities for the full exercise of his
various faculties. Upon the question of the efficiency
of the Indian peasant's agricultural methods there can
be no better testimony than that of a European expert
like Dr. Voelcker, an agricultural chemist who was
engaged by the Government to investigate the subject.
' On one point,' he writes, ' there can be no question
that the ideas generally entertained in England, and
often given expression to even in India, that Indian
agriculture is, as a whole, primitive and backward,
and that little has been done to try and remedy it, are
altogether erroneous. It is true that, no matter what
statement may be made, as deduced from the agri-
culture of one part, it may be directly contradicted by
reference to the practice of another part ; yet the
conviction has forced itself upon me that, taking every-
thing together, and more especially considering the
conditions under which Indian crops are grown, they
are wonderfully good. At his best the Indian culti-
vator is quite as good and in some respects the
superior of the British farmer; whilst at his worst it
can only be said that this state is brought about
largely by an absence of facilities for improvement
which is probably unequalled in any other country,
and that the peasant will struggle on patiently and
uncomplainingly in the face of difficulties in a way
that no one?elsehvould.'

EXCELLENCE OF INDIAN FARMING 211

And he goes on to say : ' To take the ordinary acts
of husbandry, nowhere would one find better instances
of keeping land scrupulously free of weeds, of ingenuity
in device of water-raising appliances, of knowledge of
soils and their capabilities, as well as of the exact time
to sow and to reap, as one would in Indian agriculture,
and this not at its best alone, but at its ordinary level.
It is wonderful, too, how much is known of rotation,
the system of mixed crops, and of fallowing. Certain
it is that I, at least, have never seen a more perfect
picture of careful cultivation, combined with hard
labour, perseverance and fertility of resource, than
I have seen at many of the halting-places in my
tour.'*

1 This,' says Mr. Crooke, ' is indeed high praise from
a very competent authority, but no one who is
familiar with the best types of Indian farming, the
broad st3rle of the Western Jat, the more minute
methods of the Eastern Kurmi, will hold it to be
undeserved. At the same time, there is plenty of
slovenly, indifferent husbandry among Brahmans, who
are too proud to touch a plough, or Gujars, whose
proper business is cattle-rearing, combined with steal-
ing their neighbours' beasts.

1 There are two stock charges which are commonly
laid against the Indian farmer, both of which are to a
large degree undeserved. One is his so-called stupid
reverence for traditional methods ; the other, that he
will only scratch the surface instead of properly
ploughing his field.

1 First, as to his caution and lack of enterprise, it is
true that an appeal to the customs of his ancestors
never fails to impress him ; but, on the other hand,
his methods are based on an amount of inherited
experience which few European farmers possess, and
in the absence of books his practice is regulated by

* Quoted by W. Crooke, ' The North-Western Provinces of India,'
P- 33°-

14—2

212 THE DIRECTION OF INDUSTRY

tradition, and a mass of saws and rural rhymes which
are ever on his lips. He is cautious ; but caution
is enforced for him by the conditions under which he
lives. The climate is always rigorous, and often very
uncertain. He is dependent on the amount and time-
liness of the annual rainfall, which in many parts of
the country is very precarious. His crop is exposed
to many disasters : a day or two of fierce sunshine, a
few hours of drenching rain, frost and hail, locusts,
and many other forms of insect life or blight, a bout
of fever attacking him at some critical time, murrain,
which is endemic in the land, seizing his plough cattle.
And when the crop is ripe, a night snatched for rest
may let in the thief, the wild boar, the antelope, or
one morning of neglect may set the green parrots
tearing down the ears. Such are some of the many
risks to which he is exposed. His capital is narrow
in the extreme, and he is often obliged to borrow his
seed grain. A man like this dares not make experi-
ments. Life is much too serious to permit him to
leave anything to chance. Still less can he afford to
listen to the ill-instructed censors who presume to
criticise his methods when they should be at school
themselves.

1 It is, again, a mistake to say that the cultivator is
absolutely destitute of enterprise and opposed to all
improvement. In fact, he is quite ready to cultivate
new staples, if they suit his land and modes of tillage,
and are likely to be profitable. Thus, during the
American War he turned his attention to cotton, and
in quite recent times he has largely extended the
culture of crops, like sugar, potatoes, indigo, and
opium, the advantages of which have been made
apparent to him.

1 It is true that he has adopted, on an extensive scale,
only one modern machine — the iron roller sugar-mill ;
but, as regards most of the other machines which a
well-meaning but ill-instructed zeal has endeavoured

THE CULTIVATOR'S PLOUGH 213

to force upon him, he can show reasonable grounds
for his disapproval. They are in some cases too
expensive for his narrow means, too intricate, and
incapable of repair by the unskilled village artisan.
Their object is often to save labour, an important gain
to a farmer in the Western States, but unnecessary
here, where labour is a drug on the market ; or, like
the plough, they offend the first principles of the
science which he has received from the wisdom of his
ancestors. He looks on a modern threshing machine
or scarifier with amazement, but without any enthu-
siasm. They are inventions, like the engine on the
railway, entirely beyond his practical experience,
suitable enough for wealthy sahibs who can afford to
buy and work them, but useless to a poor man like
himself.

1 And even in his affection for his ancient plough,
which is still only one stage ahead of the stake with
which the savage scratches up the soil, he is not with-
out some reason on his side. Anything heavier will
be beyond the strength of his half-starved cattle ; any-
thing that goes deeper and turns over the clods equally
offends him. It may bring sterile sand or clay to the
surface ; the damp slice turned over and exposed to
the power of the relentless sun gets baked like a brick,
and it is beyond his power to pulverize it. It will not
give him the fine tilth which absorbs every drop of
the precious dew or other moisture falling upon it ; it
may bury the noxious weeds instead of bringing them
to the surface, where they can be collected or burnt.
But his great complaint is that it widens the area to
be manured. His present scanty supply barely suffices
to fertilize the thin topmost layer of the upper soil.
What will become of it, he thinks, when a foot or
more of the subsoil, which has never been aerated or
manured, is suddenly brought to the surface ? Argu-
ments such as these may seem crude and meaningless
to the capitalist farmer with ample means, abundance

2i4 THE DIRECTION OF INDUSTRY

of manure, and haulage power at his disposal ; but
they are very real and forcible to the peasant, whose
resources are extremely limited.

' Dr. Voelcker realizes this when he writes : " I
cannot help suspecting that the system of shallow
ploughing, as practised by the native, and his aver-
sion to ploughs that turn over a broad slice and
form a wide furrow, may have something to do
with this matter of the retention of moisture, and
that the effect of deep ploughing would too generally
be to lose the very moisture the cultivator so
treasures." '

When the European entrepreneur has manufactured
his goods with what skill and economy in production
he can command, he still has the no less important
and difficult task of selling his goods to the best ad-
vantage, and all his skill and economy in production
may be thrown away if he misconceives the market in
which he has to dispose of them. With the successful
harvesting of his crop the Indian cultivator's main
care for the season is over ; the agricultural produce
which he has brought forth is intended in the first
place for food for himself and his family. If he is
deeply indebted to his landlord or the money-lender,
he may be compelled to sell in order to realize ready-
money ; and occasionally he is tempted by unusually
high prices to part with all his store, with the result
that he is generally obliged to buy it back again from
the local grain-dealer at a higher price. But the
cultivator in ordinarily prosperous circumstances who
is not at the mercy of the money-lender will set aside
enough of the harvest for the consumption of his family,
and sell only so much as is over after satisfying his
own wants. But though we must always bear in mind
that for this reason a large proportion of the food-
stuffs produced every year in India never comes into
the market at all, yet the prosperity of the cultivator
depends very directly upon the price at which he can

MARKETING, THE HARVEST 215

dispose of his produce, and in this respect the develop-
ment of the country during the nineteenth century has
been altogether beneficial to him. This facility of
marketing is a comparatively new thing in India. The
development of the means of communication is perhaps
the most important economic event of the nineteenth
century, and the multiplication of metalled roads and
railways is alone sufficient to explain the break-up of
the old industrial organization, in which every village
in India was self-sufficing. It must always be borne
in mind that before this era of cheap and rapid transit
the cultivator was at the mercy of the conditions of
the local market, and a year of teeming plenty might
be almost as disastrous to him as a short harvest.
Old reports abound in references to the distress of the
cultivators when the harvests were too bountiful, and
Bishop Heber, in 1825, argued in favour of the estab-
lishment of Government granaries upon the express
ground that the Government purchase of grain would
keep up the price ' when the cultivator was likely to
be ruined by the impossibility of obtaining a re-
munerative price.'* So, too, the decay of the pros-
perity of the Parganna Kunch, in the district of Jalaun,
is assigned to an era of exceptionally low prices :
' This was a time when, beyond all example, grain
was a perfect drug in the market. The people know
it as the teemunia period, when, as the name im-
ports, 3 maunds of gram and 60 seers of wheat were
selling for the rupee. Its duration is given at three
years — 1849 to 1851. Twenty-eight estates are said to
have broken down at once. Within this meagre
compass the tradition is vividly recalled, but no further
particulars can be gleaned. It is declared that the
very next year after this extraordinary depression the
pendulum swung violently the other way : the rains
are said to have totally failed in the months of July

* Bishop Heber's ' Narrative of a Journey through the Upper
Provinces of India,' third edition, vol. i., p. 315.

216 THE DIRECTION OF INDUSTRY

and August, when the price of grain mounted to
16 seers a rupee.' *

As will be seen later on, prices have become com-
paratively steady since the development of railway
communications. The whole of Northern India is
practically one market for food-grains, and the price of
wheat in a district in which the crops have failed is
the same, with a very small addition for the cost of
carriage, as the price in a district which has had a
bumper harvest. The existence of this large market
has conferred upon the cultivator the practical cer-
tainty of being able to sell his produce at fairly good
prices. If his direction of the processes of production
has been judicious, he finds a steady market in which
to dispose of his goods.

But not only has the normal value of his produce
risen in the general market, as will be seen by studying
the tables of prices at the end of Chapter XII., but it
is, I think, incontestable that the cultivator himself
disposes of his grain upon more advantageous terms
than in former days. It has always been the practice
that immediately after the harvest the cultivator sells
his grain to the grain-dealer wholesale, and the grain-
dealer retails it in the bazaar during the year at
fluctuating retail prices. There will, therefore, always
be a difference between the harvest price — that is, the
price ruling when all the cultivators are crowding into
the market — and the bazaar price, which represents
the average retail price realized by the dealers ingrain
throughout the year. But the difference between
harvest and bazaar prices used, in the days before
railways and cheap freights, to represent something
more than the dealer's legitimate profit. It was a
measure of the advantage he took of the temporary
glut in the market, when all the cultivators of the
countryside pushed a season's supplies together on

* F. J. White, 'General Report on the Settlement of Parganna
Kunch, Zillah Jalaun,' 1874.

HARVEST PRICES 217

the market. In 1874 Mr. P. J. White picturesquely
remarked : ' The profusion of harvest prices shows
what a necessitous creature is your ordinary ryot.
He cannot wait till after harvest until the grain-dealer
shall pay him a price in some agreement with the
average annual value of the produce. The poor helot
of the soil is forced to sell at once, forced to flood an
already full market, and thus with open eyes depre-
ciate his own goods, because his, as well as his land-
lord's, first necessity is silver wherewith to pay the
rent and the revenue.'* And Mr. White proceeded
to give an interesting table showing the difference
between bazaar and harvest prices for many kinds of
agricultural produce for the ten years 1858-67. The
average variation during this period between bazaar
and harvest prices was :

Seers in the Rupee.

Wheat ... ... ... ... 10

Gram ... ... ... ... 14

Barley ... ... ... ... 10

Juar ... ... ... ... 8

Bajra ... ... ... ... 7

These are only the average variations, but the actual
difference is in some years much greater than this.

Mr. White recorded the facts, in themselves unsatis-
factory enough, which passed before his eyes, but there
is reason to believe that even in his time the cultivator
had begun to improve his position. The point was
dealt with about the same time by Mr. R. S. Whiteway
in his ' Report on the Settlement of the Muttra District '
(1879) in so interesting a manner as to justify quotation
at length :

' There are two sets of prices in this district. They
are the prices which govern transactions in the open
market — that is, bazaar prices — and those which govern
the transactions between grain-dealers and the pro-

* P. J. White, ' General Report on the Settlement of Parganna
Koonch, Zillah Jalaun,' 1874.

2i8 THE DIRECTION OF INDUSTRY

ducers, or harvest prices. Between the two there
must necessarily be a difference, representing the
profit to the grain-dealer after his purchase and the
payment for the cost of carriage to the market. So
much profit is perfectly legitimate. But the grain-
dealing class composes a guild or fraternity to which
not only no outsider can get admittance, but which
also monopolizes the money-lending or banking trade.

Wheat.

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35 j

1876...

32

28

43

"

40

35

HARVEST AND BAZAAR PRICES

219

' The following table is extracted from the statement
given by Mr. P. J. White in his Report on Parganna
Kunch :

Year.

Wheat.

Gram.

Harvest.

Bazaar.

Harvest.

Bazaar.

1858

1859 ••

i860

l86l

1862

1863

1864

1865

1866

1867

32
30
30
26

33
28
28
20

19
24

30
17
28

23
28
18

13
12
II

14

62

35
38
34
33
3i
3i
25
28

30

36
21

35
30
26
26
17
19
17
21

Thus the members, be they baniyas or zemindars,
can compel the producer, who lives solely by the
advances they grant him, to bring his produce to their
shops and prevent him from getting the full market
value for his goods. The cultivator is, therefore, not
only crippled by the heavy interest he has to pay, but
also by the low prices he is compelled to take for his
produce. The harvest rates which I am about to give
are those given in Mr. Allen's Jalesar Settlement
Report as the prices obtaining "for delivery" from
1 8 1 3-34 for wheat and barley, and those obtainingamong
the Bajna baniyas since the year 1835.

'These Bajna rates are very fairly representative of
those obtained by the cultivators generally.

*****

'The market prices from 1813-35 for wheat, barley,
and gram are those given by Mr. Allen
Jalesar Settlement Report as ruling in the
market; those from 1843 have been extracted from
the Muttra grain-sellers, and give the prices on which
the yearly balance of sales is made up, and therefore
represent very fairly the average prices for the year.

in his
Muttra

220 THE DIRECTION OF INDUSTRY

' In this district, therefore, the cultivator is not only
getting his share in the rise of prices generally, but is
also gradually forcing the baniya to give him a better
price for his produce ; for whereas bazaar rates have
risen for wheat only 42 per cent., the harvest rates
have risen 55 per cent. The difference between harvest
rates and bazaar rates for this grain was 27 per cent,
for the first period (1813-37), 23 per cent, for the
second period (1837-57), and only 17 per cent, for
the third (1857-76). It must take time for the
benefits of the competition in the export trade to
filter down to the cultivator, guarded and hedged
as he is by custom and long-standing obligations,
but in a longer or shorter time it must reach
him.'*

The improvement in the cultivator's position relative
to the grain-dealer must obviously have been a slow
and irregular process, and could not have occurred all
over the province simultaneously. It is, therefore, not
surprising to find the settlement officers of another
district hard by coming to a less optimistic conclusion.
In 1875 Messrs. McConaghey and Smeaton, in their
Report on the Settlement of the Mainpuri District,
published the harvest prices of the district from
1840-71, and placed next to them the bazaar prices
in the Agra and Muttra bazaars. They proceeded to
say : ' A remarkable fact is brought out by these figures.
While the bazaar price of wheat during the period
1859-71 shows an increase of 58 per cent, on that of
the preceding period, the corresponding increase in
its harvest price is only 42 per cent. That is to
say, while both bazaar and harvest prices have risen
only since the Mutiny, they have not risen in equal
proportions, the divergence between them being
considerably wider in the post-Mutiny than in the
pre-Mutiny period. This is a fact established by

* R. S. Whiteway, ' Report on the Settlement of the Muttra
District,' 1879.

HARVEST AND BAZAAR PRICES 221

the incontestable evidence of figures, and is no mere
conjecture.

1 Bazaar prices must always have been governed by
the ordinary laws of supply and demand, all the com-
munity being purchasers, and the supply distributed
among many competing sellers. Therefore if the
demand increase, and the supply at hand be not in
proportion, prices will rise at once. But in the deter-
mination of harvest prices, the cultivators and the
village grain-dealer, be he zemindar or baniya, are the
sole parties concerned, and the harvest rate is literally
the bargain which they conclude with each other. But
this bargain is not altogether a free one. The tenant
is by long-established usage and his own imprudence
dependent greatly on the baniya or zemindar, with
whom he deals for his seed, rent advances, often for
his food and other necessaries of life. The grip of
the purchaser on the seller in such a bargain is a very
tight one. Hence in fixing the harvest prices the
grain-dealer, who is the purchaser, has generally the
best of it. Therefore, on a general rise in the market
rates, harvest prices, though they will not remain
stationary, will not increase in the same proportion.
It is not to be wondered at, then, that bazaar prices
have diverged from harvest prices in a greater degree
since the Mutiny than before it, seeing that all the
causes which bring about a rapid rise in market value
have been working since then, while custom and
necessity have still operated to retard the advance of
harvest rates.'

The prices for the last thirty years are given for the
agricultural year, which begins in July and ends in
June. The harvest prices of the rain crops (juar and
bajra) are the prices obtaining in the autumn of the
earlier year, and the prices of the spring crops (wheat
and barley) are those obtaining in April and May of
the later year. In the price-list of the earlier period
it will be noticed that famine prices are quoted one

222 THE DIRECTION OF INDUSTRY

HARVEST AND BAZAAR PRICES IN MAINPURI.*

Year.

Wheat.

Barley.

J uar.

Bajra. |

Year.

Wheat.

Barley.

Juar.

Bajra.

j

u

jj

jl

j

1

^

^;

j

£

j

0J

rt

<v

rt

i

V

rt

J

rt

rt

0>

rt

p

i

>

a

>

N

>

|

>

ri

>

rt

rt

>

S

«

rt

rf

ri

rt

S

3

rt

a

3

CO

a

a

•n

X

«

DC

pa

X

03

a

oa

X

pa

X

pa

HI

PQ

X

pa

1840

27

23

37

3°

34

28

32

29

1872-3

1841

27

25

37

35

30

32

28

32

1873-4

18

16

22

20

20

18

18

16

1842

31

28

40

40

37

33

35

33

1874-5

17

15

28

24

29

25

28

25

1343

34

30

42

20

37

20

36

18

1875-6

21

20

30

27

28

26

25

24

1844

35

30

5°

5i

43

45

41

40

1876-7

20

18

28

26

12

12

12

12

l84S

32

34

46

44

5o

34

47

30 1

1877-8

16

15

20

20

24

22

21

19

1846

32

32

4*

40

56

45

53

40

1878-9

16

14

20

19

20

18

18

16

1847

3i

3i

43

46

57

40

47

35

1880

18

16

22

20

21

19

19

17

1848

37

3°

53

42

62

40

56

37

1 880- 1

18

16

23

21

21

19

20

18

1849

44

37

63

16

53

19

5i

18

I88I-2

18 J 16

24

22

24

22

iS

16

I850

45

40

78

56

81

42

75

38

1882-3

18 16

25

20

22

20

19

17

1851

5o

4i

88

53

94

55

92

5°

1883-4

20

18

25

22

26

24

22

20

1852

33

28

45

36

32

38

29

35

1884-5

20

18

25

23

28

26

23

21

1853

32

29

42

40

43

37

40

35

1885-6

19

17

23

23

25

23

21

19

1854

3i

3°

40

5°

5°

40

49

40

1886-7

17

16

26

23

23

21

20

18

1855

43

40

62

54

46

5o

43

46

1887-8

18

14

20

18

23

8

21

16

1856

39

36

56

47

37

39

35

34

1888-9

18

16

21

21

24

9

22

18

1857

3°

—

40

36

43

30

4i

21

1890

16

16

22

21

21

17

19

18

1858

36

—

53

36

43

30

41

21

1 1890-I

17

14

22

17

20

14

20

12

1859

32

25

40

34

37

26

35

26

189I-2

•7

14

27

19

18

18

18

17

i860

25

16

32

27

19

13

18

13

! 1892-3

16

15

29

21

22

20

20

18

l86l

16

13

20

18

33

13

3i

13

1 1893-4

20

18

17

24

23

20

20

16

1862

3i

25

42

38

40

35

38

34

! 1894-5

19

17

13

21

22

19

21

15

1863

36

26

52

34

43

32

42

32

1 1895-6

16

13

25

16

21

14

21

12

1864

20

18

27

25

3i

3i

28

20

1896-7

II

9

26

IO

8

6

8

5

1865

20

15

33

24

32

22

31

19

1897-8

15

14

18

21

19

14

20

14

1866

19

15

28

26

21

25

25

25

1898-9

16

18

18

25

22

21

23

21

1867

19

17

24

29

34

25

31

25

1900

M

12

22

14

22

8

18

9

1868

28

18

4i

27

20

23

18

23

1 900- 1

[5

12

23

20

23

10

23

12

1869

15

12

19

17

22

15

21

15

1 901 -2

16

14

19

19

24

11

25

13

1870

18

15

27

27

35

26

3i

25

1902-3

17

17

20

20

25

15

26

15

I87I

28

25

37

3°

26

26

24

22

1903-4

"

~

~

~

~

* With regard to these figures, the settlement officers wrote :
'The schedule of harvest prices which we give has been carefully
abstracted from the books of the district grain-dealers, and the
rates are to be accepted as correct.' With regard to bazaar
prices, however, they were not so fortunate ; they accordingly sub-
stituted the prices current in the Agra bazaar from 1815-40, and
from 1857-71. 'Unfortunately, no details are available from Agra

PRICES IN MAINPURI 223

year earlier for the rain crops than for the spring
crops (as in the year 1860-61, for instance), for this
reason.

I confess I do not feel the same confidence as did
these officers in the comparability of the two price-lists
upon which they based their conclusion ; at least, it is
certain that the later history of prices in Mainpuri
does not bear out the view they took of the relations
of buyer and sellers. I am indebted to an old pupil*
for two schedules, showing the harvest and bazaar
prices in Mainpuri from 1 873-1902, extracted from
the account-books of the local dealer. I have placed
these prices by the side of those supplied by Messrs.
McConaghey and Smeaton for the earlier period, but
their full meaning is perhaps best brought out by the
chart on p. 224.

From this chart it is, I think, abundantly clear that,

during the period between 1840-57. We have, therefore, been
obliged to substitute Muttra rates during that interval.' As a matter
of fact, they have only given the rates for wheat during the important
period from 1840-57. I have, however, come upon a complete
schedule of Agra prices (in the Settlement Report, Agra District,
1880, prepared by Mr. H. F. Evans), which I have placed beside the
Mainpuri rates for barley, juar, and bajra. For wheat I have retained
the figures upon which Messrs. McConaghey and Smeaton based
their conclusions, but I am bound to remark that the difference in
the origin of their two price-lists takes away much of the value of
the comparison between them. Before the days of railways extra-
ordinary differences occurred between the prices in marts situated
close to each other ; witness the abnormally high prices recorded
by Mr. Evans for Agra in the year 1849, a year which over the rest
of the province was marked by exceptionally low prices. There is
no doubt a fairly close resemblance between Agra and Mainpuri
prices, due to the fact that similar climatic conditions usually prevail
over the two districts, but the slight divergence which the figures
indicate is sufficient to my mind to invalidate reasoning drawn to
such a fine conclusion as the difference between 58 and 42 per cent.
I have marked in heavy type the Agra prices in Mr. Evans's list
which differ markedly and irreconcilably from the Mainpuri harvest
prices.

# Syed Zainuddin Saheb, M.A., Deputy Collector.

224 THE DIRECTION OF INDUSTRY

0061

0681

0881

0Z8I

0981

0981

0*81

HARVEST PRICES 225

far from having diverged, harvest and bazaar prices in
Mainpuri during the last thirty years have been very
closely bound together. The characteristic differences
between the earlier and later period is that after
1873-74 harvest prices never fall away so completely
from bazaar prices as they frequently did in the
earlier period ; the two prices are not only more
steady at a higher level, but are also more closely
related one with another. I have collected a number
of statements of bazaar and harvest prices for various
districts, some of which are printed at the end of this
chapter. Their testimony is not absolutely uniform,
but the majority of them bear witness that harvest and
bazaar prices are nowadays very closely linked to-
gether. This becomes very evident when the two
sets of prices are dotted down upon a chart, and the
contrast between the present and earlier periods is
particularly apparent in the case of the coarser grains.
I should select the chart for bazaar and harvest prices
at Sandila (a little town in the Hardoi district) as
being typical of the relation between the two curves
in modern times. The line of harvest prices, while
generally running on a lower level, occasionally cuts
and rises above the line of bazaar prices, and the two
curves rise and fall, not only in the same direction, but
to the same extent.

The reason why harvest prices appear upon the
chart to follow the course of bazaar prices at a year's
interval is because the European system of reckoning
the year from January 1 divides the Indian agricul-
tural year into two. Thus (vide the Sandila chart)
the spring (rabi) crop of 1896 was only moderate, and
harvest prices stiffened up to 15 seers to the rupee;
but the monsoon rains of 1896 ceased absolutely in
September, and bazaar prices rose sharply for the
rest of the year from two distinct causes: (1) the
failure of the autumn crop, which put all the pressure
of supporting the population on the existing stores of

15

226 THE DIRECTION OF INDUSTRY

O)

o

CM

CO

CO

o

o

o

o

00

0)

0>

0)

en

II

! 1 1 1

8
9

10

II

12

13

14

15

16

17

18

19

COMPARISON BETWEEN THE HARVEST AND BAZAAR PRICES

OF WHEAT IN SANDILA.

Harvest = ; bazaar = .

THE SMALL MARKET 227

rabi grains, and (2) the anticipation of the failure of
the spring {rabi) crop of 1897. The extent of the
failure of this spring crop is indicated by the height to
which harvest prices attained in this year, whereas
the average annual {i.e., bazaar) price of 1897 is
brought down by the low prices prevailing in the
later months of the year after seasonable rain in July,
August, and September.

Enough has, I hope, been said to show that the
cultivator is nowadays actually making a better
bargain with the grain -dealer than he did in the
earlier periods for which we have evidence. It may
be, as Messrs. McConaghey and Smeaton believed,
that the grain-dealer was for a while able to secure
more than a reasonable share of the rapid rise in
value of agricultural produce; but the development
of the country and the regular construction of roads
and railways were forces upon the side of the culti-
vator. The development of the means of communica-
tion was the cause that all the little local markets,
with their different levels of prices, were merged into
one great market, in which prices remained compara-
tively steady. The little market, for the very reason
of its smallness, was constantly liable to be glutted ;
but the great market of to-day has to satisfy the
necessities of so large an area, that a small reduction
in the price will produce an enormous increase in the
demand, and the satiety level can hardly ever be
reached. Moreover, the whole area serving the small
market was exposed to similar climatic conditions,
whereas the market of to-day is composed of tracts
in which the rainfall has been abundant and of tracts
in which it has failed, and the years are few in which
the season is uniformly favourable over all the area of
the market. A study of the charts and prices for the
early periods will, I think, show that the profusion of
harvest prices was due to a temporary glut in the
market : all the cultivators of the neighbourhood

15—2

228 THE DIRECTION OF INDUSTRY

dumped a season's supply upon a very limited market.
The local dealers knew that their average annual sales
would only absorb a certain known quantity of grain,
and when they had laid in their store and replenished
their grain-pits for the year, only a very heavy fall of
price indeed would induce them to increase their pur-
chases ; but after an abundant harvest, the cultivators
had grain to dispose of in excess of these require-
ments, and they were compelled to dispose of it for
what it would fetch, and that is the reason why
harvest prices, especially of the coarser grains, fell
away as if there were no bottom in them. But when
the country folk had disposed of their produce and
left the market town, there was no longer the same
desperate anxiety to sell, and prices returned to some-
thing like their normal level. The baniya in such
cases was very generally abused for preternatural
rapacity and cunning, but circumstances which he
could not control in reality made his opportunity for
him. When the conditions of the market were reversed,
the cultivator was quick enough to make the most of
his position of advantage. It will be noticed (on the
charts) that in years of dearth harvest prices rose
almost to the level of bazaar prices — that is to say, in
those years the supply brought to market was not
enough to meet the normal requirements of the
town. Competition arose, not only among the corn-
dealers, but among such consumers as had the ready-
money wherewith to purchase a year's supply of
grain. The price, which the dealers had forced up in
anticipation of a short harvest, was never allowed to
fall, and, in consequence, the cultivator was able to
get the full price for his produce, and sometimes to
realize the highest price reached in the year ; for, as
explained above, it is not uncommon to find the wheat
and barley bought dear in spring being retailed com-
paratively cheap in autumn. This is made possible
by the two harvests of the Indian year. The monsoon

BAZAAR PRICES 229

rains of one year failing cause a scarcity in both the
autumn and spring crops ; it therefore happens that
in March and April — that is, immediately after the
harvest — wheat, barley, and gram sell at famine prices.
But if in July and afterwards the next monsoon brings
seasonable rain, there may be an abundant autumn
harvest, and in September and October maize, juar,
and bajra will again be selling at low prices. This
necessarily brings down the price of other food-
grains. People on the margin of doubt whether to
eat wheat or not are tempted by their cheapness to
adopt for a while the coarser autumn (kharif) grains,
and the poor use the less valuable grains indiscrimi-
nately as substitutes for each other. The people who
had hitherto eaten barley and gram betake themselves
to juar, bajra, and maize as soon as these become the
cheaper ; in this way a plentiful autumn harvest
diminishes the demand for the spring irabi) grains,
and the baniya may thus fail to realize the price he
paid the cultivator for his stores of wheat, barley, and
gram.

There is, it must be remembered, one exception to
the general improvement of the market in which the
cultivator disposes of his goods. The poor wretch
who is in the grip of the baniya {i.e., the grain-dealer
and money-lender) does not realize for his produce
even the current harvest rates, but is obliged to dis-
pose of it upon whatever terms the dealer dictates ;
but the money-lender's profit from the debtor who
has become his serf is made up of such a tangle of
extortionate interest, false entries with regard to
capital debt, and unfair estimates of the value of the
grain repaid by the cultivator, that it is a needless
refinement to attempt to estimate the price for which
he gives his debtor credit. In Azamgarh, according
to Mr. J. R. Reid (Settlement Report, 1881), the
mahajan (money-lender) values the sugar produce of
his constituents at 5 to 10 per cent, below the price in

23o THE DIRECTION OF INDUSTRY

the open market, and, moreover, weighs the produce
considerably to his own advantage. ' In the case of
any grain, however, which the cultivator may sell to
the mahajan, the terms are not quite so hard. There
is less chiselling apparently in the weighing, and value
is allowed at the market rate at harvest-time.'

After having discussed the way in which the Indian
cultivator raises and markets his produce, I may per-
haps help the English reader to realize what manner
of man he is by subjoining a description of the way in
which he lives from the pen of Mr. William Crooke,
than whom few civilians have ever been more inti-
mately acquainted with the peasantry of these
provinces :

'To begin with the zemindar, or better -class
yeoman : The house of such a man in the western
districts is generally an oblong structure, the walls
formed either of small bricks laid in mud or of masses
of indurated clay, which are piled in layers one above
the other, and allowed to harden in the sun.

'The roof of the living and store room is supported
by cross-beams, over which is placed a covering of
brushwood, and this is surmounted by a thick layer of
tenacious clay, laid in a moist state, pounded down and
consolidated by ramming. Such a roof, if properly
constructed, affords a good protection from the heat
of the sun, and though it often cracks from heat and
leaks in the autumn rains, answers fairly well for
people who spend most of their time in the open air.
Access to the interior is usually through a sort of
portico, which is often used as a cart-house or cattle-
shed. Inside is a courtyard, in which the family live,
and in which the produce or agricultural implements
are stored. If the owner be a Mussulman or high-
caste Hindu, there is often an inner courtyard, which
is reserved for the women. In the outer part the
males of the family live, guests are entertained, and
the unmarried youths sleep.

THE CULTIVATOR'S HOME 231

'You will find the owner resting, smoking, on a
wooden platform, where he sees visitors, carries on
his business, and dispenses a rude hospitality ; and
the unexpected visitor will catch, perhaps, on his
arrival a glimpse of a bright-coloured petticoat or
mantle, and hear the tinkle of a bangle or the giggling
of the girls, which announce the presence of the
women-folk close at hand. Here the pretty naked
babies wander about, and are petted by their male
relations. In a lower-class household the women
will be found hard at work in the courtyard, grinding
barley, husking rice, cooking, spinning, and chattering
all the time to each other.

1 Further to the east, where there is less danger of
damage from hail, the roof of the principal rooms is
usually made of tiles, which admit a much freer pas-
sage of air and render the dwelling-rooms much less
stuffy than in the western districts. To these the
chief danger is from the ubiquitous, mischievous
monkeys, who scamper in every direction, and though
they are an emphatic nuisance, are protected by a
most efficient sanction. It is only by spreading a
layer of thorns over the tiles or thatch that they can
be prevented from bounding over the roof and groping
for the grain which has been dropped by the ever-
present, vigilant, restless crow.

4 The prevailing atmosphere, especially in one of the
western houses, is one of stuffy frowsiness. Here
masses of foul bedding are stored, the air is full of
acrid smoke from the fire of cow-dung fuel, the cattle
are stabled close at hand, litter is scarce, dry earth
conservancy unknown. The result is that the subsoil
becomes saturated with filth, and the contempt for
sanitary precautions shows itself in a foul drain, for
the removal of the kitchen refuse, often in dangerous
proximity to the well from which the water-supply of
the family is drawn.' The Indian peasant ' has a rooted
objection to the destruction of rubbish ; this and the

232 THE DIRECTION OF INDUSTRY

refuse of his house are stored all round his dwelling-
rooms. It is only the house ashes and sweepings
which are periodically carried off to the midden, and
thence conveyed to the fields. It is only because the
habit of living alfresco is so common, and the weaker
subjects are swept off by epidemic disease at an early
age, that these conditions do not more prejudicially
affect the general health of the people.

' The house of the smaller cultivator or artisan is of
a simpler type. Here the walls are of clay and the
roof of thatch, which leaks freely in the rains ; and
when the fierce summer hot wind blows, a fire once
started in such a village spreads with dangerous
rapidity, and often leads to loss of life, as the inmates
struggle to save their meagre property. Or in the
rains the water beats against the fragile walls and the
whole structure collapses, often crushing the weak or
infirm in the ruin. The wooden seat of the better-
class yeoman is here usually replaced by a mud plat-
form beside the outer door, on which the master sits
in his leisure hour and receives his visitors.

' It is only in houses of the better class that there is a
courtyard. The ordinary dwelling is a single sleeping
hut, and outside the hut the housewife does her cook-
ing, perhaps under a small thatch, near which the oxen
stand, and the cow, buffalo, or goat is tethered and
milked.

1 On the whole, the dwelling of the poorer tenant or
artisan is cleaner and less exposed to insanitary con-
ditions than that of his richer neighbour. The floor
and outer cooking-place are carefully plastered ; the
cattle are less disagreeably prominent, and the unsub-
stantial materials of which the hut consists allow better
ventilation.

1 In the plains the best dwelling in the village is that
of the mahajan, or money-lender. It is usually built
of bricks, periodically whitewashed, with an outer
veranda, in which the owner sits over his books, meets

THE CULTIVATOR'S HOME 233

his clients, and doles out loans to cover the expenses
of a marriage or to satisfy the landlord on rent-day.
Behind this he has a series of storerooms, in which he
collects grain or other produce, or hides away the
jewellery or brass pots which he receives in pawn.
Here is a box for his bonds and stamped papers, which
he is careful to keep, of various dates, in case he has
occasion to fabricate a mortgage document. Much of
his time is spent in drawing up two sets of accounts
— one for his private information, the other for the in-
spection of the collector at the next revision of the
income-tax assessment.

' The prevailing tone of the domestic arrangements
is squalid in the extreme. The small peasant's furni-
ture consists of a few foul, rickety cots, some brass
cooking utensils, a store of red earthen potter}', a stool
or two for the children, a box for clothes or other
petty valuables, a mud granary, in which the grain-
supply of the household is stored. In the house of
the yeoman, or small proprietor, the only obvious
difference is that the brass pots are in greater abundance
and the women-folk own more heavy silver jewellery,
in which, in default of banks of deposit, the surplus
income is invested. If the owner has a few spare
rupees he piles them in an earthen cup and hides them
in a hole of the mud wall or under the place where he
does his cooking. The village banker does the same
as far as he can, for he is in constant dread of thieves,
who cut away his mud walls with a chisel during the
moonless nights and clear off all his movables.

' In the house itself the carpentry and masonry are
of the very rudest kind. The use of the arch is un-
common, and the lintels consist of weak, unseasoned
wood, which collapse under the weight of the super-
structure, and in a short time bring the whole building
to ruin. Glass windows, except in the towns, are
practically unknown ; there is nothing in the shape of
artistic furniture or articles of elegance and beauty,

234 THE DIRECTION OF INDUSTRY

such as the Japanese provide with such unerring
taste. It is only in the larger towns, and particularly
those like Agra, Muthra, or Mirzapure, which are close
to good quarries, that the fine stone-carved decorated
arches, balconies, or porticoes are to be seen. In the
village house there is no such thing as art decoration
or painting, except perhaps a rude lithograph of one
of the gods hung in the room in which worship is
done, or a coarse caricature of the guardian deity, or
of a European soldier with musket and cocked hat,
which scares evil spirits from the household.'*

* William Crooke, 'The North-Western Provinces of India,'
p. 265 cl scq.

APPENDIX TO CHAPTER IX

THE HARVEST AND BAZAAR PRICES OF WHEAT IN MUTTRA.

Harvest = — — — ; bazaar = .

235

236 APPENDIX TO CHAPTER IX

0061

0681

0881

0Z8I

038!

058!

OfrSI

HARVEST PRICES

237

00

0

O

O

O

0

0

IT)

. <S>

K

00

01

0

CO

CO

CO

CO

CO

<D

10

20

30

40

50

60

70

80

SO

1

1

it

J

/

1

U

(- 1

\ 11

\

i(\

\

i 1

nil

\

1

/ '

\ 1

f

COMPARISON BETWEEN THE ;BAZAAR AND HARVEST PRICES
(IN SEERS TO THE rupee) OF BARLEY IN MAINPURI
DISTRICT (MUSTAFABAD).

Harvest = — — — — ; bazaar = .

238

APPENDIX TO CHAPTER IX

HARVEST AND BAZAAR PRICES.

Karhal
(Mainpuri).

Saidpur Bhistri

Years.

Mainpuri.

Sandila.

B.N.M. Railway
(Ghazipur).

Panjab (Sialkot).

Wheat

Maize

Wheat

Juar.

Wheat.

Wheat.

Barley

Wheat

Barley

Cotton

a

rj

gj

rt

V

03

rt

U

re

1-

>

>

>•

a

>

4

a

rt

«

r.

«

cd

18

'M
I 6

m

22

19

w
17

22

n

20

B

P-l

K

»

X

W

X

X

«

w

1874

1875

17

l5

28

24

2C

15

32

29

1876

21

20

31

29

2 5

21

31

28

1877

20

18

20

27

25

IS

12^

12

1878

16

15

23

21

16

16

26

25

1879

1 6

14

22 20

16

IS

22

21

1880

1 8

16

24

22

2C

18

23

21

I88l

l8

16

25

23

20

17

23

21

I882

1%

16

27

2S

20

18

28

25

1883

18

16

24

22

20

18

22

20

1884

2()

1 8

29

27

25

18

30

28

1885

20

18

50

28

25

21

28

26

1886

19

17

29

27

-3

20

26

24

1887

17

16

*o

28

19

17

25

22

1888

18

14

28

19

20

18

25

23

I889

18

16

29

13

20

18

25

23

1890

16

16

25

23

18

16

22

20

1891

17

14

26

14

17

16

21

19

1892

17

14

24

17

17

16

20

19

—

13

11

18

16

1893

16

15

25

21

18

18

24

24

—

*3k

11

19

IS

\f>

16

JO

23

7

8

1894

20

18

30

23

25

22

26

24

iHi

i6i

15

8

22

10

24

23

35

33

9

8

1895

19

17

28

f9

20

18

25

23

m

12J

10

9$

13

12

25

20

40

30

9

8

1896

16

13

27

16

20

14

25

18

15

8

1 1

ioh

15

13

21

is

30

21

10

7

1897

I I

9

9

8

10

9

9

II

nk

Hi

11

8

14

9

II

11

16

IS

9

7

1898

IS

14

20

16

13

16

21

24

14*

i8|

»*

12*

13

16

20

16

30

26

8

7

1899

16

18

29

36

20

16

29

25

i«U

12

14

15

18

20

20

19

30

26

9

7

I90O

14

12

25

n

15

13

22

20

13!

I2±

15

i3i

20

18

12

11

16

16

7

7

1 901

IS

12

26

17

'5

13

26

22

14I

i4i

16

15

22

21

21

13

36

3°

8

7

1902

16

14

28

14

19

16

28

25

15?

17

15

Hi

22

21

17

15

29

26

9

8

1903

17

17

29

16

20

18

29

29

17I

I6i

—

—

—

—

20

IS

26

~3

8

7

1904

21

18

40

26

8

7

I905

|

CHAPTER X

THE INTERRUPTION OF INDUSTRY: FAMINES

Almost every industry is, from some cause or other,
liable to interruption. Some industries, such as build-
ing, can only be followed in certain conditions of
weather; for this reason the building trade in England
is always slack in the winter. In other industries the
supply of raw material is precarious, and therefore
these industries are liable to interruption for want of
material to manufacture. Such an industry is that of
cotton-spinning and weaving in Lancashire, which
was almost totally suspended during the American
War of 1 861-66, and was more recently seriously
crippled by speculative manipulations of the raw
cotton market. Owing to the interdependence of
modern industries, suspensions of work are very
frequent. Any cause which arrests the output of coal,
for instance, almost immediately suspends work in
all the manufacturing industries which make use of
steam-power ; or again, a railway strike necessarily
suspends scores of industries which are in no way
allied to the railway industry ; if the means of com-
munication are interrupted, the supplies of raw
material cannot be brought to the mills, nor can the
manufactured commodity be carried away to the
markets. Even the labourer cannot, in certain con-
ditions of modern towns, travel from his home to the
mill at which he wants to work. From whatever cause
the interruption of industry is due, it has one in-

239

24o THE INTERRUPTION OF INDUSTRY

evitable result : the labourer is thrown out of work ;
his means of livelihood are taken from him, and he
and his family suffer acute distress for a longer or
shorter period, according to the duration of time that
he is out of work.

The agricultural industry of India is no exception
to the general rule of liability to interruption. If the
rains do not fall in due season, all agricultural opera-
tions are inevitably suspended ; the baked ground
remains as hard as a metalled road, and the agri-
culturist cannot drive his ploughshare through it.
The processes of agriculture cannot even be begun,
and all who depend upon the agricultural industry are
necessarily thrown out of work. There are two facts
peculiar to India which make this suspension of
industry especially serious. The first is that the
failure of the rains in July and August entails the
almost complete suspension of agriculture throughout
the year. The kharif or autumn crop is planted as
soon as the monsoon rains have saturated the earth,
and matures quickly in the warm months of July,
August and September. During these months the
land is prepared for the rabi or winter crop, which
follows the kharif. This crop provides such work as
watering and weeding throughout the winter months,
and it is finally reaped in March or April. Thrashing
and garnering this harvest afford agricultural employ-
ment during the hot weather, until the return of the
rainy season in July begins the agricultural year anew.
Thus it is evident that if the rains fail in the months
of July, August and September, agricultural opera-
tions are suspended for a whole year, and those who
depend upon the agricultural industry are thrown out
of work for a whole twelvemonth. The interruptions
which normally occur in the industries of other
countries are not of such long duration, and therefore
we have to bear in mind, as peculiar to India, the
length of time for which the labouring classes are

FAMINES 241

thrown out of work by the suspension of the staple
industry.

The second fact which is specially characteristic of
India is the almost exclusive dependence of the people
upon one form of industry — that is, upon agriculture.
It follows from this fact that the suspension of the
agricultural industry throws the great bulk of the
population out of work. The subsidiary industries,
which owe their existence to agriculture, of necessity
suffer immediately and directly in proportion to the
unemployment in the staple industry, and therefore
the whole community is involved in one economic
calamity. Such a result would inevitably follow in
any country in which so large a proportion of the
people depended upon one industry. It does not
happen in England or France, because the population
in those countries is distributed with more evenness
among a variety of occupations, and an economic
calamity falling upon a particular group of workers
involves only a small proportion of the whole popula-
tion.

It is usual in India to speak of suspensions of the
agricultural industry as famines. This term is un-
scientific and inaccurate ; it directs attention to a
possible consequence of unemployment, but does not
give it its proper classification among economic
phenomena. It is, moreover, inexact. Now that the
relief of the unemployed is undertaken by Govern-
ment, it is not a fact that any considerable proportion
of the people die of hunger when the agricultural
industry is interrupted. The word ' famine,' however,
is so firmly established in popular usage that it is
vain to attempt to get rid of it. As happens in so
many other cases of economic terminology, we must
be content to make the best we can of a popular word,
avoiding misapprehension by the use of a formal
interpretation clause. For the future I propose to
use the word ' famine ' in its modern popular sense —

16

242 THE INTERRUPTION OF INDUSTRY

i.e., the suspension of the agricultural industry, with
consequent distress and want of employment among
the labouring classes.

Owing to the number of persons involved and the
severity of their sufferings, famines form very distinct
and prominent landmarks in the industrial history of
India. Great and devastating famines like those of
1783 and 1837 dislocated the industry and the popula-
tion of whole provinces, and their ravages can be
traced far down in the subsequent history of the
districts affected. But the popular memory is short,
and a calamity which was momentous enough to one
generation to become the era of rustic annals fades in
the memory of their successors, and in the third or
fourth generation all knowledge of it is obliterated
from the minds of the villagers. Thus we see at the
present day that, though the famines and high prices
which have occurred within living memory are popu-
larly known and frequently referred to, there is no
knowledge of the famines of the past, and it is even
said that famines are a comparatively modern phe-
nomenon. There is no evidence to show that the
climate of India has become more precarious, and
since agriculture must always depend to a great extent
upon climatic conditions, it is difficult to justify the
opinion that the agricultural industry of India was
not in the past, as in the present, exposed to occasional
interruptions — interruptions which would necessarily
occasion great distress to those who were thereby
thrown out of employment.

There are two reasons, it ought in fairness to be
recognised, why famines appear more prominent in
the present than in the past. The first is due to the
existence of the telegraph, the postal service and news-
papers. These agencies, combined with an elaborate
system of official reports, immediately diffuse over the
whole of India the knowledge of any famine which
may occur in a remote corner of the Empire. The

FREQUENCY OF FAMINES 243

newspaper reader, on learning of a famine first in
Orissa, then in Sind, and lastly in Haidarabad within
the space of ten years, immediately exclaims, ' How
terribly frequent famines are becoming ! India has
suffered from three famines in a decade.' Such know-
ledge of the misfortunes of the distant provinces was
impossible in early days, and men, in computing the
frequency of famine, would only reckon the famines
which had occurred in their own neighbourhood — that
is to say, they reckoned the number of times which
famine had fallen upon a particular area. Theirs was
really the more scientific computation. The important
thing to find out is how often in a decade or a genera-
tion the agricultural industry is suspended, and in
order to ascertain that we must concentrate attention
upon the history of one particular area.

The second reason why the famines of the past are
not recalled prominently to our minds is to be found
in the way in which history is written. To the great
majority of historians history means political history,
and economic events find no place in their scheme of
narrative. English and Indian historians are equal
sinners in this respect. I have looked through three
text-books in use in Indian High Schools and Colleges
without finding a single reference to any famine pre-
vious to 1876. The more pretentious historians are
no better in this respect. Mill and Thornton do not
say a single word about the famine of 1803-04, although
they describe in minute detail the military operations
against Holkar and Sindiah which took place over
almost the same area. The extract from the ' Seir
Mutaqherin ' given below illustrates the summary
manner in which famines were disposed of by Indian
historians. Such information as we have about the
famines of the past is chiefly the fruit of the investiga-
tions of officials of the British Government. To them
famine was an administrative problem ; it was studied
with minute attention, and all relevant evidence about

16 — 2

244 THE INTERRUPTION OF INDUSTRY

the past was diligently collected. It is to these officers
that we owe our information concerning the famines
which occurred in India immediately before the estab-
lishment of British rule — e.g., the Chalisa (1783-84) in
Upper India, and the Doji Bara (1790-92) in the
Dekkhan. The British officials recorded the oral
traditions which were current in rural society and
the evidence of the old men who could remember
these calamities, and from them they pieced together
a history of those famines more circumstantial and
more instructive than anything in the regular
histories.

I have given some reasons for the meagreness of
our information regarding the famines of the past, but
such evidence as we have is sufficient to show that, in
the matter of harvest failures, the eighteenth century
(to go no further back) was not very dissimilar to the
nineteenth century. The following famines have been
recorded in different parts of India, but precise details
and statistical information are entirely wanting :

1718. — This prevailed in Ahmadabad and Surat ;
known as the Chowtro. The price of bajri and mutt
was 4 annas per seer. Numbers of people died of
hunger and sickness, and children were sold for
1 or 2 rupees each. According to other reports the
price of bajri rose to 2 seers per rupee.

1729-33. — Severe scarcity began in 1729, and cul-
minated in 1733 in the Madras Presidency.

1739. — The invasion of Nadir Shah brought famine
to Delhi and its environs, but there is no mention of
any natural drought.

1747. — A very severe famine reported from Kutch,
Ahmadabad, and Surat, as well as from Aurangabad
and other parts of the Dekkhan. According to the
' Padshahee Diwan,' it was known as the Tulotero.
Few such famines, according to the author, ' can have
ever occurred, in which not a drop of rain fell nor did
a blade of grass grow. A rupee would purchase only

EIGHTEENTH CENTURY FAMINES 245

3 or 4 seers of grain. The people died in numbers, as
did also the cattle. The people in the villages became
restless, like fish, for want of water, left their homes
and wandered from jungle to jungle, numbers also
going to Malwa and other places.'

1757-66. — Minor famines reported from Kutch.

1769-70. — The great Bengal famine, in which one-
third of the population is reported to have died.

1774. — A minor famine in Kutch.

1781-82. — A famine in the neighbourhood of Madras,
said to have been mainly due to the war with Haidar
Ali. Mill ('History of India,' vol. v., p. 256) says:

4 The bodies of those who expired in the streets or in
the houses, without anyone to inter them, were daily
collected and piled in carts, to be buried in large
trenches out of the town, to the number, for several
weeks, of not less, it is said, than 1,200 or 1,500 a week.'

1782. — A minor famine is reported from Kutch in
this year.

1783. — The great Chalisa, which extended from the
eastern edge of the Benares province to Lahore and
Jammu.

1790-92. — There was a series of bad harvests in the
Southern Maratha country from 1787-88 to 1795-96,
which culminated in 1790-92. According to tradition,
this was one of the severest famines ever known. It
extended over the whole of the (present) Bombay
Presidency (excepting Sindh), into Haidarabad, and
affected the northern districts of Madras. It was
known as the Doji Bara, or skull famine, because the
people died in such numbers that they could not be
buried. ' It is said that some of the higher classes,
being unable to obtain grain at any price and rejecting
animal food, poisoned themselves, while the poorer
classes found a scanty subsistence from roots, herbs,
dead animals, and even human corpses. There is a
tradition that a woman in Gokak was driven by hunger
to devour her own offspring, but that the indignation

246 THE INTERRUPTION OF INDUSTRY

of the late (i.e., Maratha) Government was so great,
that she was immediately put to death by being tied
to the feet of a buffalo, and thus trodden to death.'
Prices rose to an unprecedented height, but un-
equally ; in some districts the price varied from 6 to
3 seers per rupee. In Lingsugur, in the Nizam's
dominions, the price of jowari rose to i\ seers per
rupee. From Sholapur the Mamlutdar reported that
1 before the commencement of British rule the rate of
grain was \\ seers for the rupee,' and from the neigh-
bouring Taluka of Barsee the price of i| seers for a
rupee is reported.

1799. — Scarcity in Dindigul.

Even from the above short summary* it will be
observed that towards the end of the eighteenth
century the evidence grows more abundant, and the
details regarding famine become more precise. The
traditional evidence collected in the nineteenth century
by British district officers may now be supplemented
from the diaries of English travellers and the letters
and reports of the English servants of the East India
Company. The observations of eye-witnesses have
a special value in that they record facts which were
unfortunately considered below the dignity of the
historic Muse, but which throw a strong light upon
the economic condition of the people.

* The above information is extracted from :

1. 'Report of the Past Famines in the Bombay Presidency,' com-
piled by Lieutenant-Colonel A. T. Etheridge, 1868.

2. 'Report on the History of the Famine in H.H. the Nizam's
Dominions,' by Maulvi Sayad Mehdi Ali, 1879.

3. ' Administrative Experience recorded in Former Famines,' by
J. C. Geddes, C.S., 1874.

4. ' Report on the Past Famines in the North- Western Provinces,'
by C. E. R. Girdlestone, 1868.

5. ' Report of the Indian Famine Commission,' vol. ii., 1885.

Vide also ' Cyclopaedia of India/ by E. Balfour, s.v., ' Famines,'
in which reference is made to famines on three occasions not
included in the above list — viz., 1703, 1745, 1787-88.

BENGAL FAMINE 247

The first famine of which we have evidence of this
kind is the great Bengal famine of 1769-70. As this
famine occurred only twelve years after the Battle of
Plassey, it may reasonably be accepted as typical of
the famines which occurred before British rule had
materially altered the condition of India. It has,
moreover, special points of interest. Bengal is the
one province of India which has a natural system
of inland navigation ; it is also traversed by the
Ganges, which forms a great waterway between
Lower Bengal and Upper India. Bengal has, there-
fore, always had facilities for the transport of grain
which were denied to other provinces until the intro-
duction of railways. If, therefore, the grain could not
be imported into Bengal in 1770 in quantities sufficient
to avert a terrible mortality, we may be sure that the
same difficulties were experienced in an even greater
degree in other provinces. For this reason — although
the economic development of Bengal forms no part of
the scheme of this book — I have given below a short
summary of the contemporary evidence regarding this
historic calamity. Incidentally, this summary will
reveal the great superiority, as economic evidence, of
letters and reports over the narrative of the pro-
fessional historian. The author of the ' Seir Muta-
qherin' refers to the famine of 1769-70 in the following
stately generalities :

' It was under the latter's administration that a
famine made its appearance all over the country.
It made its approaches with all its terrors, added to
a severe mortality, and to a small-pox that spared no
age or sex. Seif-ud-dowlah himself fell sick of that
distemper, and succumbed under its violence. . . .
The famine and the small-pox having made their
appearance at one and the same time in Muharrem
— that is, at the commencement of the year one
thousand one hundred and eighty-four — they both
rose to such a height and raged so violently for full

248 THE INTERRUPTION OF INDUSTRY

three months together that vast multitudes were swept
away ; nor can their number be known but to Him
who knows everything that is hidden or invisible.
Whole villages and whole towns were swept away
by those two scourges, and they suddenly disappeared
from the face of the earth. It was in such calamitous
times that Mubarec-ed-dowlah was designed Nazim
of Bengal,' etc.

This is a very meagre record of a great calamity,
and from it it is impossible to obtain a clear con-
ception of the famine of 1770.

The following is a summary of the English records :

On November 23, 1769, the Bengal Government
formally reported to the Court of Directors as
follows :

1 It is with extreme regret, gentlemen, that we are
to inform you that we have a most melancholy pros-
pect before our eyes of universal distress for want of
grain owing to an uncommon drought that has pre-
vailed over every part of the country, inasmuch that
the oldest inhabitants never remember to have known
anything like it.'

On March 16, 1770, the Resident in Behar submitted
a report, giving the results of inquiries in various
districts. ' They exhibited,' he says, ' a most affecting
scene of poverty and distress, much beyond what I
should myself have credited from report. The de-
population in the interior parts of the country is now
more rapid than can well be imagined by any person
who has not been a witness of it.' As regards his
own headquarters he says : 'The miseries of the poor
of this place increase in such a manner that no less
than 150 have died in a day at Patna.' The Resident
of Murshedabad reported that he had intended to pro-
ceed on tour, but was deterred for the present, being
1 persuaded that, though my humanity may be shocked
at the numberless scenes of distress that would pre-
sent themselves to my view, little would remain in

BENGAL FAMINE 249

my power to contribute to their comfort, while God
pleases to hold from them the blessing of rain and
the country remains parched and unfit for cultivation.
The distress of the inhabitants does not only proceed
from scarcity of provisions, but in many parts they
are without water to drink.' His assistants were out
in the district, and all tell the same harassing story.
The Indian Amil says that ' Purneah, which was once
a plentiful country, retains now nothing but the name
of its former abundance. Multitudes already have
and continue to perish of hunger.' The European
supervisor, Mr. Daniel, adds that the number of dead
bodies lying about has infected the air in a fearful
degree. In the higher pergunnahs ' I do not believe
I should in any wise exaggerate in saying that half
the ryots were dead, for if I were to speak from report
or what I have seen I should judge the number to be
rather more than less.' The information from Jessore
runs : ' Things went from bad to worse till mankind
are employed in bringing the leaves of the trees from
the jungle for food, and they offer for sale their sons
and their daughters.'

Owing to the existence of a great waterway — the
Ganges — through the afflicted tract, some supplies
were imported from Oudh, but there was the usual
unwillingness in that province to permit the exporta-
tion of food in times of alarm. Nevertheless, the grain
imported into Behar did alleviate the distress. The
Resident wrote on May 15 : ' Happily for us, our
neighbours did not share equally in this misfortune, or
we should have been deprived of those supplies to
which so large a part of the inhabitants of this pro-
vince are indebted for their present existence.' The
mortality he calculates to have already reached 200,000,
to which he adds the loss of cattle and the inability of
those men who remain to work from the weakness of
their bodies.

In the beginning of June we have another report

250 THE INTERRUPTION OF INDUSTRY

from the Resident of Murshedabad : ' Up to the end
of March,' he says, 'the ryots hoped for rain, but God
was pleased to withhold that blessing till the latter
end of May. The scene of misery that intervened
shocks humanity too much to bear description. Cer-
tain it is that in several parts the living have fed on
the dead, and the number that has perished in those
provinces that have suffered most is calculated to have
been, within these few months, as six to sixteen of the
whole inhabitants.' The last phrase has all the ap-
pearance of being an English translation of a popular
computation, for 6 annas in the rupee would be the
ordinary Indian way of representing this fraction. On
July 12 we have a further report from the Resident.
'The representations I have hitherto made from hence
of the misery and distress of the inhabitants for want
of grain and provisions were faint in comparison to
the miseries endured in and within thirty miles of the
city. Rice only 3 seers for a rupee, other grain in
proportion. And even at those exorbitant prices not
nearly enough for the supply of half the inhabitants ;
so that in the city of Moorshedabad alone it is cal-
culated that more than 500 are starved daily, and in
the villages and country adjacent the numbers said to
perish exceed belief

The famine ended with the rice harvest in October
and November, 1770. On December 14 the Govern-
ment inform the directors that the famine has entirely
ceased. Numerous reports testify to the depopula-
tion of the province. In Birbhum it was said ' many
hundreds of villages are entirely depopulated, and even
in the large towns not a fourth of the houses are
inhabited. In this large district in 1765 there had
been close on 6,000 villages under cultivation. Three
years after the famine there were little more than
4,500.' The estimate made by the Council in Novem-
ber, 1772, and officially reported after its members had
made circuits through the country in order to ascertain

BENGAL FAMINE 251

the state of things accurately, was that one-third of
the population had died, and this, as Mr. (Sir) W. W.
Hunter remarked, implies the death of 10,000,000, as
the whole population in Bengal in those days can
hardly be estimated at less than 30,000,000. Another
estimate puts the mortality at 3,000,000, but in the
absence of any trustworthy data for computation, we
must be content with such general impressions as are
to be gathered from the extracts which I have given.
The main outlines of the calamity are plain enough.
Even with the assistance of a great waterway through
the centre of the afflicted tract, importation on an
adequate scale was impossible. Private charity was
powerless to cope with the distress. Such stores of
grain as existed in the country were rapidly exhausted ;
consequently, until the ripening of the succeeding
harvest there was absolutely no food in the country,
and the people died of hunger in immense numbers.

Evidence such as that which we possess regarding
the Bengal famine multiplies as one province after
another comes under British rule. It increases with the
improvement of the administration, until, at the latter
end of the nineteenth century, we have elaborate
official narratives of famine and reports of famine
Commissions in which the cause, the growth, the
course of the famine, and statistics of rainfall and
mortality are faithfully tabulated.

We have trustworthy historical evidence regarding
the famines of the United Provinces in the last century
and a quarter. This period may be roughly divided
into two epochs, the first of which only will be dealt
with in this chapter. The dividing line between the
two epochs is traced by the introduction of railways
into India. It is of course impossible to draw a definite
line between the two epochs, as the character of famines
changed gradually with the gradual perfection of rail-
ways ; but as the specification of a definite date is an
aid to memory, I have selected the year 1853 as the

252 THE INTERRUPTION OF INDUSTRY

close of the first epoch. My reason for selecting this
date is that the first line of railway was opened from
Bombay to Thana in 1853. In a scientific classifica-
tion the first epoch should embrace the whole time
from the dawn of history down to the construction of
railways, but as nothing is to be gained by including
in this list famines with regard to which we have
little detailed evidence, I have begun my survey from
the year 1783. The first epoch, therefore, covers the
period from 1783 to 1853. These seventy years may
be accepted as typical of the ages which preceded, the
ages during which it was mechanically impossible to
bring food to the famine-stricken areas. The second
epoch, from 1853 to the present day, will be dealt with
in a separate chapter, which will be devoted to the
question of famine relief.

The following is a list of the more important famines
in the first epoch :

1783-84. The great Chalisa.

1803-04. Famine in the Doab.

181 3-14. Acute distress in the Doab.

1818-19. Famine in the Northern Doab.

1824-25-26. Drought in the Delhi territory and

Rohilkhand.
1 833-34. Famine from Cawnpore to Bundel-

khand and Ajmer.
1 837-38. A devastating famine over all the

United Provinces.

In addition to these famines, the history of several
districts reveals the occurrence of special scarcities
which were peculiar to those districts, but which, to
the populations concerned, brought almost as much
suffering as the widespread famines. A chart of the
prices of a single district* will often reveal scarcity of
which there is not historical evidence, and will exhibit

* Vide the Agra price-lists recorded by Mr. H. F. Evans.

MEANS OF TRANSPORT 253

characteristics quite dissimilar to those of a chart of
the prices of another district in the same province. I
do not propose to go into the history of all these
famines in detail, but to select three — viz., 1783-84,
1803-04, and 1837-38, as illustrative of the period.

The distinctive feature of the epoch from 1783 to
1853, as of all the ages which preceded it, was the
mechanical impossibility of transporting large quan-
tities of grain over considerable distances. Reference
has been made before to the state of the country at
the beginning of the nineteenth centur}'. Metalled
roads did not exist, and therefore transport by cart
was impossible over long distances. The usual means
of transport in those days was the pack-bullock, which
could only carry a small load at a prohibitively high
cost. Navigation canals did not exist, and transport
by water was therefore confined to the rivers. Of all
the means for moving grain from one place to another,
the rivers were in those days by far the most impor-
tant, and there is reference in the old reports to many
marts like that of Bilsi in Badaon,* which owed their
pre-eminence to their proximity to the great water-
ways. But we have seen from the case of Bengal in
1770 that even great natural advantages for inland
navigation were not in those days capable of bringing
enough grain into a famine-stricken province to save
the people from starvation. The rivers of the United
Provinces are, as waterways, far inferior to those of
Bengal. The tract which can be supplied with food
from the rivers is comparatively small, and navigation
is difficult because the water in the stream is generally
either in defect or in excess.

In addition to the absence of roads and good water
communications, a third difficulty was noted by Sir
John Strachey, whose official career coincided with
the transition from the first to the second epoch. He

* Vide ' Statistical Report of the District of Badaon,' by H. M.
Court, C.S., 1852.

254 THE INTERRUPTION OF INDUSTRY

showed by a statistical computation that ' the total
carriage of the provinces — i.e., bullock carts, ekkas,
pack-bullocks, etc. — would not suffice to carry one-
tenth of the 800,000 tons required to feed the Rohil-
khand division alone'; and in 1867 Mr. Girdlestone,
summarizing the lessons of previous famines, insisted
upon the futility of attempting to supply the deficiency
of the harvests by importations. Both these officers
wrote when the construction of metalled roads had
been in process for a number of years, and therefore
it is easy to imagine how much greater must have
been the difficulties of transport when there were no
metalled roads at all in the country.

It is, however, useless to elaborate the point ;
whether we rightly appreciate the difficulties of trans-
port in those days, or whether we do not, the fact
remains that grain was not imported into famine-
stricken districts. Historical evidence establishes
beyond challenge the fact that the people either died
of hunger in their homes, or wandered into neighbour-
ing provinces in search of food.

It is sometimes asserted that stores of grain were
preserved in towns and villages, and that these were
sufficient to mitigate the distress which would other-
wise have been occasioned by the failure of the harvest.
That some grain was so stored is probable, and the
practice which has survived into the present day of
buying supplies of corn shortly after harvest, is an
indication that such provision was considered wise in
earlier days. But the contention that the amount
stored was sufficient to mitigate famine is absolutely
disproved by the evidence. The price-lists of food-
grains conclusively demonstrate that grain was not
stored in large quantities. The characteristic of the
price-lists of this period is violent fluctuation. Had
large stores of grain been preserved they would have
equalized prices, whereas what we actually observe is
that as soon as the failure of the harvest was pro-

STORAGE OF GRAIN 255

nounced, prices rose sharply, and reached a height
which can be explained only on the assumption that
there was no grain to be had in the district. In ex-
treme cases the staple food of the country was enhanced
to more than twelve times its normal price. An
example of such an extreme rise will be found in the
price-lists from Chinsurah, which record that, from a
normal level of 40 seers per rupee, the price of coarse
rice in 1770 rose to 3^ seers per rupee(^^cChapterXIL).

In the extracts which follow there will be found
evidence that the people themselves frequently be-
lieved that there were large stores of grain in the
country, but that they were held back by rapacious
grain-dealers. This is a cry which is always raised
at the time of great scarcity, and it will appear from
the extracts that it was believed by the English
officials. But it happens that the credibility of this
popular cry was on one occasion thoroughly tested.
In the Orissa famine of 1866 the district officers were
imposed upon by the current belief in large stores of
grain, and advised against the import of rice from out-
side. On examination it was found that the stores
had been grossly exaggerated, and the province
suffered severely for want of that rice which the local
officers were averse to importing. The Commission
which examined into the origin and conduct of the
Orissa famine came to the conclusion that the popular
belief in hoards of grain was not worthy of credence.

The evidence for these assertions will be found in
the history of three famines I have selected for ex-
amination.

1783-84. — This terrible famine occurred in Sambat,
1840, and hence it was known as the 'Chalisa.' It ex-
tended from the Karamnasa to beyond the Sutlej, and
included Behar Oudh, the Province of Agra, a great
part of the Panjab, and most of the Central India
States. It long survived in rural tradition as one of
the very greatest famines, and served as an epoch in

256 THE INTERRUPTION OF INDUSTRY

popular history in the same way as in the next
century did — first — the famine of 1837-38, and after-
wards the Mutiny, from which at the time of writing
old men still compute time.

The districts most affected were not in those days
under British rule, and we are therefore compelled
to depend largely upon tradition. Mr. Girdlestone*
summarized the evidence of this kind which he had
been able to collect as follows : ' The first sound of
alarm came from the neighbourhood of Agra, and
from this centre distress seems to have diverged both
to the East and the West. The prices of grain for
many months previously are said to have indicated
much disturbance of the ordinary seasons. In the
upper part of Hindustan, indeed, an extraordinary
drought had prevailed for two years. During the
spring and summer of 1783 the inhabitants of Delhi
and its vicinity had experienced great difficulty in pro-
viding for their own wants, and the gravest apprehen-
sions were entertained for the cold-weather crop,
owing to the continued absence of rain. The dwellers
beyond the Jumna were emigrating in the direction of
Lucknow as early as October, and death left its mark
freely along the road. Such was the general apathy
that the bodies were not removed from the spot where
they lay, even in towns or villages. No relief was held
out to the sick or dying. Every man's hand was
against his neighbour, and the strong ruthlessly seized
the portion of the weak, for the struggle to maintain
life overcame all scruples. In this solitary instance
the drought affected Oudh also, though in a less degree
than the surrounding country.'

Nowhere was the famine more intense than in the
Hissar Division, the country then known as Hariana.
Lieutenant Cunningham, in his history of the Sikhs
(p. 124), writes: 'A famine desolated Hariana; the

* ' Report on the Past Famines in the North-Western Provinces,'
1868.

THE CHALISA 257

people perished or sought other homes. Sirsa was
deserted, and a large tract of country passed at the
time from under regular sway and could not after-
wards be recovered by the Sikhs.' Captain Wall
writes (in his reply to the Famine Commission, 1880):
' No one can fail to observe the enduring mark left on
the country and its tenures by the famine of 1783. In
Hissar that famine literally depopulated the country,
and the whole agricultural stock perished. At its
close hardly any of the original inhabitants remained.
Few villages now existing even pretend to a history
which goes back to a period before this famine, and
there is not one that does not date its present form of
tenure from the time when cultivation was resumed.'
This impression is confirmed by the President of the
Bengal and Orissa Famine Commission, 1866, Sir
George Campbell. ' Twenty years ago, when this
event was scarcely beyond the memory of the most
aged, the President lived in very intimate relations
with the people of the Upper Sutlej, and both the
popular accounts and clear historical traces seemed
to him distinctly to point to more complete and
permanent desolation than anything known in modern
times. A new era and a new population seem to
reckon from that date, the Native year or Sambat 1840.'
The only contemporary evidence regarding the
famine in the most afflicted districts which 1 have
come across is the following curt and grim notice in
the Calcutta Gazette, May 13, 1784: 'Wheat is now
selling at Battabah, 9 seers, at Lahore, 4 seers, and at
Jummoo, 3 seers.'*

* Mr. H. G. Keene, who has made a particular study of this
period of the history of Hindustan, adds : ' Children were left to
wander and feed on the berries of the forest, and thus became an
easy prey to the wild animals, who, shaking off all fear of man, fed
upon human flesh in open day and in the most public places.' — Vide
p. 407, 'A Sketch of the History of Hindustan,' by H. G. Keene,
W. H. Alien and Co., London.

17

258 THE INTERRUPTION OF INDUSTRY

Behar was upon the fringe of the famine area, and
we, therefore, have considerable contemporary evi-
dence from the English officers of the severity of the
Chalisa in that province. But we have the word of
Warren Hastings that 'it raged most violently in the
countries most remote ' from the possessions of the
Company, and therefore a description of the condition
of Behar would give us no clue to the sufferings of
Upper India ; for this reason I make no extracts from
the records of the East India Company.

1803-04. — The famine of 1803-04 was the first of the
famines in the United Provinces of which we possess
official records ; in the proceedings of the Sudder
Revenue Board we have a series of reports sufficiently
detailed to enable us to trace its main outlines with
confidence. The famine extended over Gorakhpur,
Rohilkhand, and the Doab. It had its origin in a
severe drought. On September 4 the Collector of
Cawnpore reported that, ' so far as he knew, not a
single shower had fallen throughout the Ceded
Provinces since August 12, and hot winds were
blowing just as in May and June.' By the beginning
of 1804 the famine was at its height. ' The Tehsildars
and Government officers still did their best to en-
courage artificial irrigation, but the people were
becoming disheartened and reckless. Many were
disposing of their cattle and their implements, while
those who had nothing more to sell were forsaking
their homesteads and emigrating.'

Mr. Girdlestone suggests that, in addition to the
drought, a contributory cause of this famine was
the unduly heavy assessments which were made by
the English officers on taking over the new districts.
It was shown in Chapter II. that the land revenue
demand was very oppressive, and that the Govern-
ment was obliged to remit a large proportion of the
revenue in this year owing to the distress. Whatever
the cause, I consider that the scarcity of 1803-04 is

THE FAMINE OF 1803-04 259

fairly typical of a moderate famine in this epoch. It
was clearly not a desolating famine like the Doji Bara
or the Chalisa, but the failure of the harvest un-
doubtedly caused considerable though temporary dis-
tress ; the poorer classes were without food, and they
adopted the only remedy which immemorial tradition
had taught them — they wandered from their homes in
search of food. But it certainly was not the popular
opinion that the grain-stores of the country were
exhausted, as in Bengal in 1770. The magistrate of
Jaunpur, J. Deane, in a letter to Government, Sep-
tember 17, 1803, wrote: 'The superstitious prejudice
attached by the natives to an earthquake, and the late
irruption of the Mahratta Horse in the Doab, has so
alarmed the minds of all that the possessors of grain
can scarcely be induced to bring it into the market at
any price, and the evils of famine already begin to be
felt, while the whole country is notoriously stocked
with a supply sufficient for three years' consumption.
This store is almost exclusively in the hands of the
Zemindars, and generally not kept for sale.' Fortu-
nately the truth of this popular belief was not brought
to the test of experience, as the famine was entirely
closed by a good autumn harvest (kharif) in 1804.

By far the most valuable lesson to be derived from
a study of this famine is the evidence it supplies with
regard to the movements of grain in those days.

On September 27 the Governor-General in Council
issued a proclamation to the effect that a bounty
would be paid on all grains imported from Bengal at
Benares, Allahabad, Cawnpore, and Fatehgarh. The
rate of the bounty was as follows :

For every 100 maunds of

Benares
Allahabad
Cawnpore
Fatehgarh

Wheat and Barley :

Other Grains

Rupees.

Rupee-.

17

15

22

19

24

23

31

27

]

7—2

26o THE INTERRUPTION OF INDUSTRY

Persons importing grain in consequence of this
proclamation were at liberty to dispose of their grain
at such price and in such manner as they judged
proper. ' While these efforts were being made to
bring grain from Bengal to points varying from 500 to
600 miles distant, in the immediately adjoining province
of Rohilkhand grain was as abundant and fully one-
third cheaper than in Bengal. In July, 1804, wheat
and barley were selling in Bareilly at 60 seers per
rupee, whereas, in Bengal, the former was selling at
44 only. The distance from Fatehgarh is about seventy
miles ' (Baird Smith). It will be seen from the price-
lists in the Appendix to Chapter XII. that wheat was
then selling in Aligarh at 19 seers 12 chitaks to the
rupee ; but in spite of the enormous difference between
the prices in the two markets, it was practically im-
possible to transport wheat from Bareilly to Aligarh.
Similarly, in the famine of 1837-38, grain at its highest
was selling in Agra at 11 seers the rupee, while in the
neighbouring province of Malwah it was selling at
50 to 60 seers the rupee. These two facts are con-
vincing evidence of the difficulties of transport in this
epoch.

1 837-38. — The famine of 1837-38 was the last of the
great desolating famines which characterized this
epoch ; like the Doji Bara in the Deccan, and the Chalisa
in Upper India, it loosened the bonds of society, laid
waste large tracts of country, and permanently modi-
fied the development of industry. It is the one famine
of the old type of which we possess adequate detailed
record ; the reports of the local officers at various
stages of the famine are, in many cases, still extant,
and Mr. Girdlestone, in his ' Past Famines in the
North-West Provinces,' has given a history of it
which covers twenty-eight pages. The main features
of the famine may be clearly traced, and they are un-
mistakably characteristic of the worst famines of this
epoch. There had been a succession of bad harvests

THE FAMINE OF 1837 261

since 1832, which had caused considerable distress in
various localities. The summer of 1837 brought a
terrible drought which extended over the greater part
of the Doab, and into Banda and Gualior on the west,
and over Behar, and as far as Calcutta and Cuttack on
the east. July and August are described as having
been absolutely rainless, and such were the anticipa-
tions of dearth that ■ in Aligarh the baniyas would not
produce grain even when payment was offered at their
own exorbitant prices.' With the prospect of inevi-
table starvation at their homes, the people naturally
began to wander ; in August Bulandshahr was already
being overwhelmed with emigrants from Marwar and
Hariana. In September there were a few partial
showers towards the south, but in the upper Doab
this month was practically rainless. ' The utter hope-
lessness of their case was enough in the minds of the
lower classes to justify recourse to violence, and soon
in Rohilkhand, Allahabad, Aligarh, Agra, Bulandshar,
Gurgaon, Rohtak, and Delhi, neither grain-boats nor
store-houses were safe from attack, whilst the public
roads were dangerous to travellers, owing to the
number of armed men who were roaming about in
quest of plunder.' On October 20, John Lawrence
wrote from Gurgaon : ' I have never in my life seen
such utter desolation as that which is now spread over
the pergunnahs of Horul and Pulwul. The people
have been feeding their cattle for the last two months
on the leaves of trees, and since this resource has
failed, are driving them off.' The difficulty of feeding
the cattle is often mentioned. From Cawnpore in
the beginning of 1838, Mr. Rose wrote: 'There was
not, I am told, in 1783 that total absence of vegetation
which has caused the present dearth of cattle, and
in milk the people then possessed a valuable article of
food which is now wanting. . . . To those who have
not witnessed the melancholy change it will scarcely
be credible that an extensively-cultivated and thickly-

262 THE INTERRUPTION OF INDUSTRY

populated country like the Doab could, by one year's
drought, be reduced to its present state of waste and
desolation. Flourishing villages, which last year
contained from 300 to 400 cultivators, are now
occupied by half a dozen starving beggars, and I have
travelled for twenty miles in the pergunnahs adjoining
the Jumnah, where there are no wells, without seeing
a vestige of cultivation.' The accounts of distress as
given by Mr. Rose are fully corroborated from other
sources. So long as the rich zemindars had the
means, they fed their poor neighbours, and even went
to the length of selling jewels and ornaments in order
to raise money for the purchase of food. When their
resources were exhausted and the baniyas proved
inexorable, the poorer classes resorted to the jungle,
in the hope of securing a meal from some of the wild
trees. The small thorny berry of the Singarbar was
in great request, as was also the bark of the wild fig-
tree. The people dried and pounded what they
gathered, and, with a little addition of meal, had the
means of making a sort of chupati (bread) that was
just palatable. Women were ready to sell their chil-
dren for 2 or 3 seers of wheat, whilst their husbands
and brothers waylaid and plundered travellers. Gold
and silver were parted with at half their ordinary
value, and brass and copper were esteemed worth
their weight in grain. Artisans disposed of their tools
at a quarter their cost price.

Newspapers at this period come to our assistance
as contemporary records of famine, and in the English-
man of March 24, there is the following graphic
account: 'You ask me to tell you all about the famine
in Cawnpore ; but, indeed, no account nor description
of mine could convey to you any adequate idea of the
misery of the poor in this place and throughout its
vicinity. At the beginning of the cold season the
station literally swarmed with starving wretches, and
now where are they ? I believe I am within bounds

NEWSPAPER ACCOUNT 263

when I say that in cantonments alone, but a short time
back, from twenty to thirty died daily. The river,
owing to the sluggishness of the stream, became
studded with dead bodies, and we have ceased to eat
of its fish or drink of its waters. At last it became
requisite to hire establishments, not merely for the
purpose of taking the starved-to-death wretches to the
ghats for their being flung into the Ganges, but also
to have a river establishment in constant play in order
to push down the corpses below Gajmow. The Relief
Society feeds about 1,500 daily ; but then, owing to the
villainy of those who have to serve out the food, in
spite of the most energetic exertions on the part of the
superintendent, the attah (flour) was so adulterated
with chunam (lime) and sand, that heaps upon heaps
have died from eating it, and now there is great diffi-
culty in getting the poor to go to the almshouse.
Kungla guards patrol the station all day long, not
merely to give notice where the dead bodies are lying,
but to drive the living to the refuge. A great number
of poor have lately left the station to get in the scanty
harvest. They will never return. Starvation will be
their lot. Of grain there is abundance in the province,
but there is no labour for the poor, and consequently
they have no money to buy food. The Calcutta
people seem to be in earnest, but let them keep in
mind that the famine in and about Cawnpore has been,
is, and must continue, and that every rupee that can
be raised should be sent up as soon as possible.
Between Calpee and Agra it is perfectly dreadful.
The dead are seen lying together by fifties. To add
to the misery of the poor starving population, the
small-pox is becoming rife at Cawnpore.'

It is useless to multiply accounts of the misery of
the people. The story everywhere is the same.
Society was entirely disorganized, and horrors of
every kind pervaded the land. The people abandoned
their homes, and for years afterwards evidence of

264 THE INTERRUPTION OF INDUSTRY

the depopulation may be found in the Settlement
Reports.

The sole object of quoting these painful records is
to show the acuteness of unavoidable suffering in days
when facilities of transport were defective. Public
and private charity were never wanting, but they were
unable to do more than touch the fringe of the distress.
Mr. Rose 'doubted whether it was not beyond the
power of Government, as it certainly was of the local
authority, to give adequate relief; and as for private
charity, though the inclination to contribute was
general, the amount subscribed was as a drop in the
ocean compared with the general distress.' The
Government at headquarters seconded to the best of
its ability the efforts of the local officers ; in Farukh-
abad 'permission was accorded to the magistrate to
make disbursements from the public treasury to any
amount zvithout limit for the employment of the desti-
tute on works of public utility'; roads were built and
tanks excavated. Private individuals fed at their own
cost a limited number of persons a day. Mr. Hamilton,
the Commissioner of the Agra Division, gives a some-
what grudging recognition of the work done in the
Feudatory States. ' In a season of such unprecedented
calamity it is a noble sight to view the thousands who
are saved from death by the generosity of the British
Government. In this respect we have set an example
to surrounding States, of which but little advantage
has been taken. Yet they have done something,
though trifling. In Bhurtpore baked cakes are dis-
tributed at each of the gates daily to as many as apply,
as far as the amount (5 maunds each gate, I believe)
will go. In Dholepore and at Baru one day's food is
given to every traveller, but he must pass on, and
food is distributed to the poor of the territory as in
Bhurtpore, though I know not the limit. In Gualior I
am not aware that any sort of assistance is afforded by
the State, but the inhabitants of that country have the

IMMOBILITY OF GRAIN 265

fertile tracts of Malwah to emigrate to, and in the
adjacent States of Bhopal and Saugor grain is
abundant.'

The reason why public and private charity both
failed to alleviate the distress to any considerable
degree was that it was impossible to increase the
stores of grain in the country. The well-to-do, by
distributing some of their wealth, made it possible for
the poor to buy a little grain at the greatly enhanced
prices prevailing, but they could not by importation
reduce the price in such a manner as to bring food
within the reach of the poor. This is strikingly illus-
trated by a reflection of the Commissioner of Agra.
In his report upon his tour through his division at the
beginning of 1838, he says: 'Had a good and open
communication existed for wheeled carriages between
Agra and Malwah, the grain which is abundant there,
and is selling at 50, and even 60, seers the rupee, might
have reached its market.' The price of grain at Agra
in this year was 11 to 12 seers the rupee. The highest
prices recorded during the famine were :

Seers the Rupee.

Aligarh ... ... ... ... 18

Allahabad ... ... ... ... 17

Cawnporc ... ... ... ... 13

Farukhabad ... ... ... ... 12

Mathra ... ... ... ... 12

Karnal ... ... ... ... 12

Agra ... ... ... ... 11

Banda ... ... ... ... 10

Almorah ... ... ... ... 10

Balundshahr ... ... ... 8

Of the mortality during the famine we have no
trustworthy statistics. Colonel Baird Smith estimated
that the total population affected by the famine of
1 837-38 must have been between 8,000,000 and 9,000,000,
and that the population within which the intensity of
suffering was greatest, and the mortality highest, must

266 THE INTERRUPTION OF INDUSTRY

have been roughly about 5,000,000. The area of the
famine tract he guesses to have been from 20,000 to
25,000 square miles, and he doubts whether the general
mortality could have been less than 800,000. But we
have no means of ascertaining whether these figures
are even approximations to the truth.

CHAPTER XI

THE RELIEF OF THE UNEMPLOYED : FAMINES
{continued)

In the epoch which we have now to consider (1853-
1906) the character of famines undergoes a gradual
change. During these years the means of transport
were greatly improved, and what I may call the
immobility of food-stuffs was overcome. The harvests
were bad at irregular intervals in different provinces,
but, as the crops never failed simultaneously over the
whole of India, it was possible to supply the dearth
in one district out of the abundance of another. The
province, therefore, was never entirely denuded of
food, as was Bengal in 1770 and the Doab in 1837-38.
The fundamental difference between a famine at the
beginning and a famine at the end of the nineteenth
century was this : At the beginning of the century the
price of food rose so high as to be absolutely beyond
the reach of the majority of the inhabitants, and even
at these exorbitant rates it was often not to be had ;
many of the well-to-do were unable to buy food, and
in some cases they poisoned themselves to avoid the
slow torture of starvation. At the end of the nine-
teenth century there was plenty of food, even in the
districts in which the crops had failed altogether ; the
price indeed was high, but it was not absolutely pro-
hibitive, even to persons of moderate means. Such
persons had to suffer great privations, but they had
not the horrible prospect of death by starvation.

267

268 THE RELIEF OF THE UNEMPLOYED

Death by starvation was, indeed, a not improbable
contingency for the poorer classes, who were in the
habit of supporting themselves by labour ; but that
was because they were ' out of work,' and therefore
had no money wherewith to buy food, not because
there was no food to be bought.

The improvement in the means of transport was, of
course, a gradual process. From the time of Lord
Dalhousie (1848-56) the construction of metalled roads
was vigorously prosecuted ; the Upper Ganges Canal
(for navigation as well as irrigation) was opened in
1854, and by 1861 the East India Railway had reached
as far (from Calcutta) as Cawnpore. Of the effects
of these modest beginnings we have evidence in the
famine of 1860-61, the first famine with regard to
which we have a detailed report (by Colonel Baird
Smith). This report gives a graphic account of the
condition of the country at the beginning of the second
epoch. Colonel Baird Smith has recorded the de-
velopment of the grain trade in those days under the
stimulus of high prices. ' The profits,' he wrote, ' to
be realized in the grain trade [were] excessive. While
wheat was selling in Agra, Muttra, Allyghur, and
Meerut at about 4 rupees per maund, it was selling in
the adjoining districts of the Lower Doab at 2 rupees,
and in remoter districts, east of the Ganges and west
of the Jumna, at from 14 annas to R. 1/4 per maund.
The remotest points from which I have reliable evi-
dence of supplies having been drawn are — to the
south-eastward, the Benares division, from whence
Agra received considerable quantities ; to the south-
westward, the Saugor and Jubbulpoor territories,
Gualior and Dholepoor, which have helped to feed
Muttra and Delhi. . . . The whole line of the Ganges
from Allahabad to Farruckabad was crossed by scores
of streams of food, not large individually, but in the
aggregate swelling to a great amount, and pouring
the surplus stores of favourably situated tracts in

MEANS OF COMMUNICATION 269

Oudh into the Doab. So miserable, however, are the
means of intercommunication in many of these dis-
tricts of supply that, while in one bazaar famine prices
of 4 rupees per maund might be ruling, in another not
thirty miles off the price would be but about R. 1/8
for the same quantity ; yet no flow from the full to
the exhausted market could take place, because
roads were not in existence, and means of carriage
unknown.'*

Such was the paucity of metalled roads that the
traffic was concentrated upon the Grand Trunk Road,
and Baird Smith estimated that about 1,000,000 maunds
passed to Aligarh along this road, the greater share
being concentrated in the months of January, February,
and March. This great accumulation of traffic wore
the road out, and between Cawnpore, Fategarh, and
Aligarh it was totally disorganized. Baird Smith
declares that when he saw it in spring ' it was worse
than an ordinary earthen road.' During this famine
the Ganges was little used for transport, owing to
the low level of the water ; but, in spite of the many
defects in the means of transport, grain was brought
into the famine area in sufficient quantities greatly to
reduce the mortality. Baird Smith calculated ' that
the entire imports of grain into the famine tract from
every source had not fallen under about 3,000,000
maunds between September and February inclusive,
or at the average rate of 500,000 a month, being-
enough for the sustenance of nearly a sixth part of
the entire population of the bad districts.'

In the thirty-five years that succeeded the means of
communication were gradually perfected. By the end
of the nineteenth century the province was covered
by a network of railways, over which the grain was
quickly moved by private traders in response to even

* ' Report on the Commercial Condition of the North-Western
Provinces of India,' Colonel R. Baird Smith, 1861. (The first part
of his famine report.)

270 THE RELIEF OF THE UNEMPLOYED

a small rise in price. The value of railways for con-
veying grain into famine-stricken districts was clearly
established by the famine of 1877, but I will not
fatigue the reader by recounting the various stages
by which complete protection from starvation was
slowly established. The great harvest failure of
1896-97 illustrates with fidelity what is meant by
1 famine ' at the end of the second epoch, and the
conditions in which it has to be combated. The
review of the famine which Sir A. P. MacDonnell
published at its close (November 27, 1897) gives an
admirable picture of the economic conditions which
then prevailed, and of the measures taken by Govern-
ment to relieve the unemployed.*

When prices rose to the extreme level which they
attained in the autumn of 1896, representations were
made to Government to undertake the duty of
importing grain. The result of the interference of
the State with the course of trade is that the private
trader, deprived by Government competition of the
prospect of profit, abstains from buying and selling
grain, and thus at the very time when the greatest
activity in the grain trade is desirable, the myriad
small agencies by which food is usually distributed
are suspended. For this reason Government in
1896-97 steadily adhered to the principle of non-
interference. ' In one or two instances in isolated
tracts there was some doubt whether the resources
of the petty village traders would be equal to the task
of importing the grain required for the consumption

* The reports of Famine Commissioners published at various
times by the Indian Government constitute a body of economic
literature of the highest value. The five volumes issued by the
Famine Commissioners in 1880 are a veritable thesaurus of economic
wisdom ; but if I had to select one famine report to place in the
hands of students, I should select the ' Narrative of the Measures
adopted for the Relief of Famine during the Years 1896 and 1897,'
which was published by Sir A. P. MacDonnell in the Allahabad
Government Gazelle on November 27, 1897.

MOBILITY OF GRAIN IN 1896-97 271

on relief works, and in remote villages discretion was
given to local officers to assist such traders, if neces-
sary, with money advances ; but this discretion was
little used. Private trade everywhere and always
proved equal to maintaining and distributing an ade-
quate supply of food grain, even in the most dis-
tressed and isolated tracts. There can be no doubt
that this would have been impossible but for the
extensive railway communications which now exist
in all parts of these provinces, whereby the wheeled
traffic and pack-cattle were set free to spread the
grain among the villages from the nearest railway-
stations. The railway returns show that for the nine
months alone from October, 1896, to June, 1897, the
rail-borne imports of food grain were 645,628 tons,
and the exports 306,377 tons ; while this vast and
beneficent trade movement was effected not only
without difficulty or apparent effort, but with great
pecuniary advantage to the State. Of these imports
nearly 325,000 tons came from Bengal, the greater
part being Burma rice carried from Calcutta.'*

The mobility of grain at this period is best shown
by comparing the prices in different districts. Prac-
tically the price was the same in the district in which
the harvest had failed as in the district which had
enjoyed a bumper crop. In 1896-97 the rate of a
particular grain was sometimes quoted higher in a
well-stocked Meerut district than in a market of
afflicted Bundelkhand.

The development of railway communication had
thus, by the end of the century, deprived a 'famine'
of one of its greatest terrors. Even in areas in which
the crops have totally failed food is now to be had in
abundance. The price, however, is high, and the
people thrown out of work by the interruption of
their industry have no means of purchasing it. How

* Noiih-Westem Provinces Government Gazette, November 27, 1897,
p. 484,

272 THE RELIEF OF THE UNEMPLOYED

can they be maintained until they can resume their
normal occupation? This is the problem which
'unemployment' presents in all countries, and it is
a problem for which more and more the State in all
countries is being pressed to find a solution.

In the relief of the unemployed the practice of the
Government of India is in advance of that of any
European State. For every province an elaborate
code of instructions (known as the Famine Code)
had been prepared, laying down the principles to be
observed and the practice to be followed on every
occasion of threatened or actual scarcity. The actual
working of this code may be illustrated by the
measures taken in 1896-97 for the relief of the un-
employed in the United Provinces.

The principle which guided the administration of
relief was at an early date declared in the following
words : ' The only limitation to the relief to be given
will be the necessities of the people.' But against this
principle must be set another, which was not less
steadily kept in view — the principle, namely, that
State relief must not interfere with the normal
organization of industry. There are two dangers
which must always be kept in view in rendering
State aid to the unemployed. The first is, that 'for
want of State aid the people may die of starva-
tion ; and the second is, that State aid may tempt
them away from the prosecution of their own in-
dustries ; for, if aid is given by the State on a lavish
scale, the people may find their lives upon the relief
works so comfortable that they may be unwilling to
return to their normal means of livelihood. This was
recognised by Sir Anthony MacDonnell, and unhesi-
tatingly enunciated.

' It was a cardinal principle of relief administration
in the North-Western Provinces and Oudh that some
labour should be exacted from everyone seeking relief
who was not incapacitated for work by age or in-

PRINCIPLES OF FAMINE RELIEF 273

firmity, or in rare cases (chiefly in the case of women)
by social status. From the able-bodied a full task,
from the weakly and from the children over seven
years of age a smaller task graduated according to
their various capacities, was required. This was the
keynote of the system, and in judging of the system's
material results should not be forgotten. In pursuance
of this principle, vast numbers of inefficient labourers
have been employed, to the lowering of the out-turn
of work done per rupee of expenditure. But it was
deliberately decided that, in the best interests of the
people themselves, industry should be encouraged
and idleness or sloth discouraged. The best proof of
the complete success of the policy adopted is to be
found in the fact noticed in the sequel, that the relief
works had no attraction and that, on the first oppor-
tunity the people returned, undemoralized and with
cheerfulness, to their ordinary avocations.'

The form of employment offered to the people who
came for relief was earth-work, as being the only one
suited for unskilled labour ; the embankment of roads
and the excavation of tanks were the projects chiefly
selected. The workers were divided into gangs, and
to each gang was allotted a certain measured task,
calculated according to their strength. When the
allotted task was finished, the labourers were free to
go, having earned the daily wage, calculated on a
sliding scale, according to the price of grain, as suffi-
cient to purchase a day's ration. Under this system
it was not open to the labourers to earn a higher wage
by doing a larger task. If the allotted task was not
completed, a proportional reduction was made from
the wages of the entire gang or of the group of
labourers who were at fault, subject to a minimum
which represents a penal or bare subsistence allow-
ance. Gratuitous relief was provided at the works
for those dependents who, from age or infirmity, were
unable to render any task. The great bulk of the

18

274 THE RELIEF OF THE UNEMPLOYED

dependents were young children, who formed 90 per
cent, of the whole dependent class.

Relief was also given by Government in the follow-
ing categories :

(a) Employment at their homes for women who are
debarred by national custom from appearing in public.

(b) Gratuitous relief in poorhouses, chiefly for home-
less cripples or casual vagrants, who were drafted on
to the relief works when their strength was re-
established.

(c) Gratuitous distribution of relief at their homes
to persons who were unable to labour, and were
reduced to distress.

The organization of relief in these three categories
was a complicated and delicate task, but it was pri-
marily in the nature of charity to enable the recipients
to tide over a season of high prices. The central
problem was the relief of the able-bodied unemployed,
and this was solved upon the large earthworks.

The cause of the harvest failure of 1896-97 was the
premature cessation of the rains in August. In Sep-
tember distress began to make itself manifest, and
test works were opened by Government. Bundel-
khand, which had suffered from a succession of bad
harvests, was already in need of assistance. By the
end of October evidence of distress became apparent
in a considerable part of Oudh, chiefly in the Lucknow
division. ' In the Rohilkhand division every district
was threatened with partial failure, and in Agra the
country outside the canal-protected area had begun
to need relief. In parts of Benares and Gorakhpur
districts there were forebodings of the scarcity which
subsequently developed there, and test works had
become necessary. The hill districts of Kumaon, en-
joying good harvests, lay outside the sphere of possible
distress, and Meerut and part of Agra sat secure in
their network of canals. . . .

' About the middle of November the failure of the

APPEARANCE OF DISTRESS 275

late autumn crops became definitely declared, while
the employment afforded in garnering them had con-
siderably slackened. The construction of temporary
wells, so largely stimulated by advances from Govern-
ment, approached completion. The spring sowings
were arrested for want of rain, and irrigation alone
continued unabated for the occupation of agricultural
labour. Prices continued to rise, and the poorhouses
were rapidly filling. Between November 14 and 21
the poorhouse population had risen from 7,200 to
19,000, and the later admissions in some parts showed
signs of emaciation. Labourers and their families
began to flock on the relief works in the more dis-
tressed districts ; the sphere of gratuitous relief con-
tinued to expand, and a certain number of cultivating
tenants, too, found it necessary to seek employment,
or to send the idle members of their families to the
works. Finally, signs of distress began to appear
amongst the petty artisans, weavers, and the like,
whose occupation had ceased along with the pros-
perity of their customers. ... As December drew to
its close the conditions existing in the previous month
became intensified and developed. Home resources
became more exhausted, field-work more circumscribed,
and the numbers seeking relief continued steadily to
increase. The poorhouse population was, in pur-
suance of the policy of Government, kept down by
drafting the inmates to relief works as they became
fit for labour, or transferring them to the village
lists (category c) where this measure was found suit-
able. . . . January opened with 410,238 people,
workers and their dependents, on relief works, while
86,641 were in receipt of gratuitous relief in poor-
houses or at their own homes. Week by week the
numbers rose by 100,000 or 150,000, or even more.
The average daily increment may be placed at 18,000.
By the end of January the total on relief works had
reached over 1,000,000. During February the recruit-

18—2

276 THE RELIEF OF THE UNEMPLOYED

merit went on at the rate of over 14,000 daily. When
the accounts were made up on February 27 the total
number on relief works was found to be 1,381,337,
while 315,385 persons were in receipt of gratuitous
relief in poorhouses, or at their homes. The total
was thus 1,696,722. That day was the flood-mark of
the famine. . . . Taking all forms of relief together,
the numbers dependent on Government, which were
351,093 at the end of December, had risen to 1,305,217
by the end of January, and by the end of February
amounted to 1,696,722.'

By the end of February the distress was so wide-
spread that many persons who had from motives of
pride or indolence or suspicion refrained from seeking
the relief works began to come forward for assistance.
' It was noticed that the new applicants for employ-
ment or relief were often in an emaciated condition,
and compared unfavourably with those who had been
prompter in seeking State support. In the earlier
stages of the famine people were deterred from seeking
or accepting relief from motives which lost force as
time went on. Caste reasons were potent, and
instances were brought to notice where money doles
had been refused or actually returned by villagers
because the recipient had been threatened with expul-
sion from the brotherhood. Grotesque reports were
current among the people unaccustomed to such wide-
spread bounty, and ever anxious to discover some
hidden motive for it. Rumour had it that everyone
who accepted relief was to be subjected to demoniacal
influences, or sent across the sea to labour islands, or
to people new countries which the Sarkar (Govern-
ment) had acquired, or made to apostatize, or marked
down for future sacrifices to the deities who are
supposed to watch over the stability of great railway
bridges. Instances, too, were not wanting of the
struggle between natural affection and the love of
life. A starving girl refused to take relief unless an

NUMBERS ON RELIEF WORKS 277

understanding was given that when she was sent
away to the strange land her old father should be cared
for while alive, and decently buried when dead. As
time passed these absurd beliefs and restrictions wore
themselves out.' The ripening of the spring harvest
and the occurrence of the Holi festival drew large
numbers away from the relief works in March. By
April 10 the 1,381,000 people who swarmed on the
relief works at the close of February had fallen to
under 700,000. The total number in receipt of relief
in all forms was almost exactly 1,000,000. As the
harvest work became exhausted the people began
steadily to flow back to the works. By May 1 the
700,000 on the works had become 935,000. During
May the numbers steadily grew, and at the close of
the month they again exceeded 1,500,000. Agricultural
work was in abeyance, and the people dependent on
daily labour for their support continued to return till
the second high -water mark on relief works was
reached on May 29, when the daily attendance on
the works was returned at 1,157,000. The rainy
season usually sets in during the month of June, and,
in anticipation of work at their homes, the people now
began to withdraw from the works. For the first
fortnight the decrease in numbers was slight. ' Here
and there one or two members of a family would
return home to look after the repairs of their houses,
as customary at this season, and make their other
little arrangements to prepare for the burst of the
monsoon ; but the bulk of the labourers awaited the
opening of the rains. June 12 found 1,096,000 still on
the works. With June 13, however, commenced a
series of showers in nearly every district, light at
first, but persisting and increasing in a way which
soon left no doubt that the welcome monsoon had
stolen in. The effects of the break of the monsoon
upon the relief workers was immediate and significant.
Within one week the numbers on relief works fell by

278 THE RELIEF OF THE UNEMPLOYED

over 500,000; on June 19 the numbers stood 963,000;
on June 26 they had fallen to 449,000; and on July 3 to
415,000.' Here, as in March, the natural result of the
reopening of the field - work was assisted by the
measures of Government. The tasks on the relief
works were made more severe, and the scale of wages
was hardened ; every means was employed to make
the people prefer their normal avocations to the
Government relief works. 'The relief measures,
which had been carried on patiently and steadily for
the past eight months, and in Bundelkhand for over
a year, since famine had declared itself, now bore
golden fruit. The peasantry had been maintained in
health and strength, and were ready with almost
unimpaired vigour and in undiminished numbers to
commence the tillage of the new crops, on which their
fate depended. The resources of the Indian Charit-
able Fund had been largely reserved to meet this
crisis. By the liberality of the English-speaking
public, over 30 lakhs (.£200,000) of rupees were now
distributed among the villagers to purchase seed
grain, and replace the plough cattle which they had
lost. This munificent charity was liberally supple-
mented by advances of State funds to small proprietors
and cultivators of the better class. There were some
apprehensions that seed grain might not be forth-
coming in the parts where famine had been most pro-
longed ; but, seeing the people generally possessed
the means to pay for it, the traders quickly solved the
problem of supply. Assisted and encouraged in these
ways, the agricultural community turned with cheer-
fulness and resolution to the congenial task before
them. . . .'

Owing to a break in the rains at the beginning of
July, there was a temporary check to the decrease in
numbers receiving State relief; but as soon as climatic
conditions favourable to agriculture were re-estab-
lished, the labouring people flocked back to the fields.

CLOSING THE RELIEF WORKS 279

' By the end of July the number of persons supported
on relief works had fallen to under 100,000, and the
bulk of them were confined to five or six districts.
This number sank steadily through August, as field
labour expanded; early in September it was only about
15,000, and on September 15 the last of the relief
works was closed.'

The resumption of field-work does not, of course,
bring fresh stocks of grain into the market, and the
fall of prices was but slight until the autumn harvest
was garnered. The persons who were unable to
labour were therefore no better off than before the
rains, and charitable relief was extended to them in
undiminished numbers until the ripening of the
earliest autumn crops. The end of August still saw
400,000 on outdoor relief, and 34,000 people in poor-
houses. By the middle of September the recipients
of outdoor relief had fallen to about 231,000, and the
poorhouse population to 21,000. By October 1 the
corresponding numbers were 115,487 and 5,017. 'By
October 20 the Lieutenant-Governor was able to in-
form the Viceroy that the relief operations had been
practically closed by the distribution of the authorized
parting dole, and that there remained as a charge on
the Government only a few hundred infirmary patients
and 2,000 orphans.'

The characteristic of this splendid piece of adminis-
tration was that State aid did not pauperize the people.
The relief was so organized that they were anxious,
whenever occasion permitted, to return to their normal
avocations.* This is shown by the extreme sensitive-

* This result was obtained by steadily keeping the pay upon
relief works below the ' standard wage ' which could be earned in
any ordinary labour market. During January, February, and May,
the months when agricultural work is always slack, the attractive-
ness of the relief works for the able-bodied labourer on the look
out for a job was minimized by the regulation that no labourer
could earn more than the daily wage by doing a larger task ; and
the daily wage was calculated on a sliding scale, according to the

28o THE RELIEF OF THE UNEMPLOYED

ness of the numbers in receipt of relief to any expansion
of the demand for field labour. The spring harvest
and the monsoon ploughing and sowing are indicated
by the numbers upon the relief works as faithfully as
in an agricultural almanack. As soon as the weather
permitted it the people resumed their suspended in-
dustry with vigour. Agriculture, instead of being, as
in the past, crippled for several years after the famine,
was resumed upon the same scale as before it was
interrupted, and, in fact, the area sown in 1897 was
actually 3-3 per cent, above the normal. This single
fact is sufficient proof that State aid did not hamper
the resumption of private industry.

But the other principle which Sir Anthony Mac-
Donnell had formulated at the beginning of the famine
— viz., that the only limitation to the relief should be
the necessities of the people — was no less faithfully
observed. So successful were the measures of relief
that the mortality in the provinces was only very
slightly raised by a famine which was spread over
72,500 square miles and involved 34^ millions of
people. The following figures show more eloquently
than any description how efficient was the administra-
tion of relief.

' The normal mortality in the provinces for the
decennial period previous to 1896 was 33*04 per
thousand. During the twelve months of famine

price of grain, as sufficient to purchase a day's ration only. As
soon as there was a demand for labour in the fields, the attractive-
ness of the relief works was diminished by enhancing the daily task.
As the wages paid were calculated at a day's ration they could not
be reduced, but the same result was obtained by increasing the
labour by which this ration could be earned. Those who in England
demand that in the relief of the unemployed the Government
should not pay less than the ' standard wage ' should notice that in
the only case in which the State has undertaken to provide work
for all the unemployed success was due to the fact that the Govern-
ment steadily kept relief pay below the ' standard wage ' of the
country.

MORTALITY IN 1896-97

281

prevalence in 1896-97 it was 36*30, giving an excess
of only 3*26 per mille.

1 An abstract of the monthly returns will show at a
glance how far the mortality of the famine period rose
above the ordinary death-rate in any month.

Entire Province.

Actual
Death-rate.

Normal
Death-rate

3-09

3^

270

334

SOI

3-10

3"07

2-68

2-37
1-97

3-11

3"i9
2-89
2-58
278

2-13
2*62

3 "04
272

2'45

3"34
3-86

273
3-01

October, 1896
November, 1896
December, 1896
January, 1897
February, 1897
March, 1897
April, 1897
May, 1897
June, 1897
July, 1897
August, 1897
September, 1897

The death-rate, it will be seen, rose on the whole
but little above the normal average in the famine
months up to July — that is, for ten months it was only
29*10 per mille in the provinces, or r8o per mille above
the normal. But the death-rate increased in August
and September, the malarial season. Taking the
whole period of twelve months of famine prevalence,
the death-rate of 36*30 per mille may be compared
with the mortality during the same period in 1893-94,
when the provincial death-rate was 38*05 per mille.

Thus it appears that in the course of the nineteenth
century two of the problems presented by famine have
been solved. Want of food has been overcome by im-
provement in the means of communication, and the
want of work has been met by providing temporary
employment on relief works at the expense of the
State. But there remains a third problem, which
statesmen and philanthropists are ambitious of solving,
and that is the absolute prevention of famine, or, to

282 THE RELIEF OF THE UNEMPLOYED

state the problem more accurately, the prevention of
the periodic unemployment of a large proportion of
the population. A little consideration will show that
there are two ways in which the solution of this
problem may be approached in India. The first is
to free the agricultural industry from its dependence
upon the chances of the weather, and the second is
to diminish the number of people dependent upon
agriculture.

The principal cause of the suspension of agriculture
in India is drought ; frosts and floods do from time to
time injure the crops and inflict serious damage upon
the cultivator, but I know of no instance in which they
have suspended agricultural occupations as completely
as a prolonged drought does. If, therefore, the culti-
vators can be provided with an adequate supply of
water for irrigation the agricultural industry is prac-
tically secured against interruptions. Artificial irriga-
tion in the United Provinces may be provided from
canals or tanks or wells ; these constitute the most
important part of the fixed capital which has been
sunk in agriculture, and they have, therefore, already
been described in the chapter upon agricultural
capital. It is only necessary here to refer shortly to
the extent to which these works have rendered agri-
culture independent of the rainfall. The Northern
Doab during the first epoch (1783- 1853) was par-
ticularly subject to famine. In six out of seven
famines between 1783 and 1837 the Doab was the
scene of the most acute distress ; in the words of the
Indian Irrigation Commission, 'before the introduction
of canal irrigation the districts composing this tract
were among the most insecure in Northern India;
and the construction of the Ganges Canal was largely
due to the impressions produced by the sufferings of
the famine of 1837.' With this may be contrasted the
security which now reigns in this region, which is
officially described as 'protected against famine.'

VALUE OF IRRIGATION 283

During the great drought of 1896 the Meerut and
Agra divisions, in the picturesque language of Sir
A. P. MacDonnell, 'sat secure in their network of
canals'; and not only did the cultivators escape
calamity, but they made enormous profits out of the
misfortunes of their neighbours ; it was a common
saying at the time that, owing to the exceptionally
good prices realized, many men who were involved
beyond hope extricated themselves from debt in a
single season.

But the scope of canal irrigation is limited. In
certain areas the introduction of canals would lead
to a rise in the level of the subsoil water, and would
result in the water-logging of the soil.* In some
districts it is mechanically impossible to bring water
to the places where it is wanted. In other places
water may be brought by canals, but only at a cost
which would lay a permanent burden upon the
general body of taxpayers. Tanks are a useful source
of artificial irrigation in years of normal rainfall, but
they are usually dried up or reduced to very small
dimension in the years of drought, when they are
most needed. Wells are a source of supply which
has proved of the greatest value in the past. ' There
can be little doubt that in 1896-97 it was the wells,
and the wells alone, which saved the greater part
of the Ganges -Gogra Doab from a famine which
would have rivalled in intensity that of Bundelkhand.
They made possible the sowing of the rabi, and the
replacing over a large area of the failed khan/by rabi
crops. Largely owing to the prompt and timely
action taken by the Local Government in granting
liberal advances under the Loans Act, over 550,000
temporary wells were made in that year, the con-
struction of some thousands of masonry wells was

* For this reason the Taluqdars of Oudh are strongly opposed to
the construction of an irrigation canal (the Sardah Canal) in that
province.

284 THE RELIEF OF THE UNEMPLOYED

put in hand, and many others were repaired and
improved. Probably not less than half the extra
wells were made with the money advanced.'* Not-
withstanding the large extent to which well irrigation
is already practised in the United Provinces, the
Irrigation Commission reported that there was wide
room for its extension, and they recommended that
certain concessions should be offered and tried. On
the other hand, they recognised that there are certain
tracts for which well irrigation is altogether unsuit-
able. This rapid survey of the means of artificial
irrigation shows that in the course of the last century
something has been done to render the agricultural
industry secure from interruption, and that within
certain areas artificial irrigation has been highly
successful ; the survey shows no less clearly the
inevitable limitations of artificial irrigation. The
day does not seem to be near at hand, in India or
anywhere else, when agriculture can be rendered
altogether independent of the weather.

I have mentioned before that there is another way
in which the periodic distress occasioned by the sus-
pension of agriculture may be mitigated — that is, by
reducing the number of people dependent upon this
single industry. The Famine Commissioners in 1880
were of opinion that the only radical cure for famine
would be found in ' the encouragement of diversity of
occupation among the people.' This was also the
lesson upon which the late Mr. Justice Ranade loved
to insist. In 1890 he said: 'The co-ordination of
industries, which regulates the due proportions of
men who plough the soil and raise raw produce with
those who manufacture this raw produce and others
still who exchange and distribute it, and the interplay
of whose threefold activities makes a nation thrive,
was never a very strong factor of our collective social
polity. We have been all along, like most ancient

* § 538, Report of the Indian Irrigation Commission, 1901-3.

DIVERSITY OF OCCUPATION 285

nations, more or less exclusively agricultural. But
our contact with the world outside, and the freedom
of exchange which has resulted in consequence, have
produced one most undesirable result. They have
aggravated the situation by making us more than
ever dependent upon a single and precarious re-
source.' In 1893 Mr. Justice Ranade returned to the
same subject. 'About twenty -two years ago,' he
said, 'I had occasion to notice this collapse of
domestic industries, and the gradual rustication of
our chief occupations . . . and it was about this time
that a welcome change took place, whose effects are
now perceptibly visible. Things were as bad as
could be about 1870-75; since then the tide has
turned, and India has shown signs of a revival, which
marks its first step in the transition from a purely
agricultural into a partly manufacturing and trading
country.'* This is also the economic basis of the
Swadeshi movement, or movement for the encourage-
ment of indigenous manufactures. Thus it is evident
that there is a considerable body of opinion in favour
of the view that the true remedy for famine will be
found in the increase of diversity of occupation. It
may perhaps prevent disappointment in the future
if the exact scope of this remedy is examined a little
more closely. The effect of such a change in the
industrial organization of India would be, that irregu-
larity of employment would be more evenly distri-
buted. At present something like 30 to 40 per cent,
of the people are thrown out of work at the same time
by the failure of the rains ; during these hard times
they necessarily curtail their purchases as much as
possible, and the subsidiary industries which depend
upon the patronage of the agriculturists are deprived
of their normal markets. Were the people distributed
more evenly among a variety of industries, a smaller

* ' Present State of Indian Manufactures.' Industrial Conference,
Poona, 1893. Reprinted in ' Essays on Indian Economics.'

286 THE RELIEF OF THE UNEMPLOYED

proportion of them would be out of work at the same
time ; the people who remained in employment would
keep up the demand for goods of domestic utility, and
the persons thrown out of work might find some em-
ployment in the non-agricultural industries.

This argument is true as far as it goes, but it must
be borne in mind that ' diversity of occupation ' does
not profess to be a radical cure for unemployment.
Diversity of occupation would not diminish the irre-
gularity of employment ; it would only spread the
evil more evenly over a number of years. In one
year agriculturists would be out of work, in the next
the workers in the textile industry ; the coal trade
would be interrupted in the following year, and the
iron and steel trade in the year after. There is no
ground whatever for supposing that employment is
more constant in any of these industries than in agri-
culture. The experience of Europe is quite the other
way. Employment in the modern manufacturing in-
dustries is eminently precarious. The result of
adopting the industrial organization of Europe would
be that India would suffer from a constant succession
of small 'famines' in place of the irregular recurrence
of great ' famines.' This would be a clear economic
gain, for these minor 'famines' would not involve the
bulk of the population ; whereas the suspension of
agriculture at the present day dislocates the industry
of an entire province.

It is not, however, clear that the individual worker
would gain in like degree. Figures do not exist to
enable us to make an exact comparison between the
amount of unemployment in England and India, but
the returns which are quoted below are sufficient to
show that unemployment is a very serious and chronic
evil in England. In some branches of the iron industry
the number of men thrown out of employment in a
generation is not less than four times the total number
of men employed in those industries in one year;

UNEMPLOYMENT IN FAMINE YEARS 287

roughly speaking, this is equivalent to the total sus-
pension of the industry for a year on four occasions
in one generation. If we were to assume that all
agriculturists were thrown out of work during a
famine, this would be equivalent to four famines in a
generation, or one famine every seven or eight years.
During the lifetime of the last generation (i.e., from
1870 to 1903) there have been two severe famines in
the United Provinces, and this method of calculation
would lead us to the conclusion that unemployment
in the iron industry in England was twice as frequent
as in agriculture in India. I would, however, point
out that this calculation is so very rough as to have
next to no value for purposes of comparison. In the
first place, we have, for India, no means of ascertaining
how many agriculturists are out of work or partially
employed in average years — i.e., the not-famine years.
In the second place, it is not correct to assume that,
even in a famine year, the whole of the agricultural
population is thrown out of work. In 1896 the out-
turn of the autumn harvest was 39*25 per cent, of an
average yield, and when the forecast of the ensuing
spring crops was most gloomy, it was estimated that
the area of the spring crops would be 58 per cent,
of the normal cultivation. In Bundelkhand, which
suffered most severely from this famine, the area sown
for spring reaping varied from one-fourth to one-half
of the usual extent. These figures show that even in
a very bad year there is a considerable amount of field
work to be done, and it is not correct to say that the
agricultural industry is entirely suspended.

The figures with regard to unemployment in
England are more precise, but they do not cover the
whole field of labour. The statistics prepared by the
Board of Trade are accepted as the best available
indication of the condition of the labour market ;
these are prepared as follows : A large number of
Trade Unions in the engineering, shipbuilding, metal,

288 THE RELIEF OF THE UNEMPLOYED

printing, wood-working, building, and other trades,
make weekly payments of various amounts to their
unemployed members. Consequently they are bound
to keep a strictly accurate record of the persons
entitled to such benefit, and many of them are also
able to show how many members are still unemployed
after having exhausted their claim to unemployed
benefit. It is true that the members of the Trade
Unions which keep these records include but a com-
paratively small minority of the total industrial
population, but it forms as a whole a sufficiently
representative sample of that population to justify the
conclusion that changes in the state of employment
for the workpeople included reflect corresponding
changes in the state of employment as a whole. There
are two considerations which lessen the value of these
returns, but as they would modify the conclusions in
exactly opposite directions, there is ground for the
hope that the two errors neutralize one another. The
first consideration is that unskilled casual labour is
insufficiently represented in the returns, and unskilled
casual labour suffers most from irregularity of em-
ployment. The second consideration to be borne in
mind is that the unions which insure their members
against want of work are the unions in the unstable
trades. With these qualifications the Board of Trade
puts forward these statistics as trustworthy. The
figures given in the annexed table do not include the
sick and superannuated, who are not counted as un-
employed. From the membership on which percentage
is based the superannuated are excluded, but not the
sick, on the ground that the latter are only temporarily
disabled. In the annexed table I have given in the
first four columns the figures for the four trades
which in the official returns are classified as one
group, in order to show the extent of the fluctuations
in the precarious trades. The succeeding four
columns represent groups of trades. The last column

UNEMPLOYMENT IN ENGLAND

289

PERCENTAGE OF UNEMPLOYED IN PRINCIPAL
TRADE UNIONS*

General

Amalga-

Boiler-
makers

Wood-
work-
ing and

Fur-
nishing.

Print-

Per-
centage

Year.

mated

Iron

Iron

and Iron

Build-

ing anc

Other

from all

En-
gineers.

Founders

Moulders.

and Stee

Ship-
builders.

ing-

Book-
binding

Trades

Unions

included

in

Returns.

1870

4*1

7-2

3-8

37

4-8

3'5

0"2

3*9

1871

I'O

25

18

—

2'5

3S

2-0

0-3

i-6

1872

o-6

I "4

27

1*0

12

2'4

I'5

O'O

0-9

1873

08

3*3

4-0

12

0-9

1-8

1 '3

0-3

I-2

1874

1 '4

41

73

2 '5

08

21

i-6

O'l

17

1875

2'3

37

7'9

59

o*o

2*0

16

0-3

2'4

1876

3*5

60

100

8-5

07

2'4

2*4

1 "3

3 7

1877

4-8

94

io-8

8-3

I "2

3*5

2-6

2-8

47

1878

6-9

151

17-4

9-4

3'5

4-4

3 '2

3"o

6-8

1879

10-6

233

23*3

95

8-2

8-3

40

3' 3

11-4

1880

5'o

ii-5

"'5

80

6'i

3'2

3-2

2"2

5 "5

1881

35

8-3

8-5

i-8

5'2

27

2-8

1 '5

3 5

1882

I '9

47

II -o

07

3-5

2-5

2-4

0-9

2'3

1883

22

47

8-1

2-1

3-6

2'5

2*2

I "2

2-6

1884

4'8

7-8

23 I

20 -8

47

3*o

2'I

1 "4

8-i

1885

67

"•5

31-6

22 "2

7'i

4'i

2'5

i-8

9 "3

1886

76

14-6

34*2

21*6

8-2

47

2*6

5*2

IO"2

1887

6-1

IO-6

26*0

167

6-5

3-6

22

1-9

7-6

1888

4'2

59

I3'5

7-3

57

3'l

2'4

3*2

4 "9

1889

1-9

2'0

51

2*0

3*o

2*4

2'5

O'O

21

1890

i'7

26

6-8

3'4

2-2

2 '5

2-2

i-6

2-1

1891

3"2

5'°

133

57

I g

2"I

4-0

17

3-5

1892

63

9-2

17-1

10-9

3-i

3-8

4'3

5-6

6-3

1893

8-3

io-8

20 -8

17*0

3"i

4*1

4-l

2-6

7"5

1894

8'5

10-9

17*2

l6"2

43

4 '4

57

2-1

6-9

1895

5'9

86

181

13-0

4 "4

3'6

49

3'5

5-8

1896

2-3

3'2

91

9 '5

I "3

2*0

43

3-0

3 '4

1897

2-4

7*5

8-4

86

1*2

22

3'9

2-6

3'5

1898

2'5

3'6

6-5

47

0-9

2'3

3 7

2-3

3-0

1899

2-4

18

5-8

2"I

12

2"I

3-9

2-4

2-4

1900

22

3"o

10*2

2-3

2-6

2-8

4-2

3'i

2-9

I901

2-9

67

IO"0

3-6

3*9

37

4'5

3-8

3-8

I902

4*4

7-8

12-8

8'3

4-o

4'l

4-6

3 '3

4"4

1903

4'4

74

12-5

117

4 '4

47

4*4

3 "9

5"i

may, with the caution given above, be accepted as
indicative of the state of employment in England in
the last generation.

1 The fact that unemployment in the engineering,

* Board of Trade Report (Code 2,337), ' British and Foreign Trade
and Industry,' 1904.

19

29o THE RELIEF OF THE UNEMPLOYED

shipbuilding, and metal trades (the first four columns)
fluctuates more violently than in industry as a whole,
though in the same direction, is not difficult to explain
when it is remembered that this group of trades is
largely concerned with the making of the instruments
of production — machinery, implements, ships, engines,
etc., and other forms of fixed capital, and that a very
small expansion or contraction in the total output of
commodities in the country is likely to cause a
relatively large expansion or contraction in the
demand of new instruments. Thus this group of
trades affords a very sensitive, though exaggerated,
indication of changes in the labour market as a whole '
(Code 2,337).

As has been said before, there are no figures for
India comparable to the table on p. 289 ; but it is
evident that the experience of England does not
justify the view that diversity of occupation is a
remedy for unemployment.

CHAPTER XII

PRICES

Outside the reports of the British Government, there
are very few records in which to trace the economic
history of India. I conceive that a diligent search
might possibly reveal some useful records kept by
large landowners or the managers of their estates, but
my own inquiries upon this point have hitherto been
fruitless. There is, however, one order of economic
facts, with regard to which very complete records
have been kept, and that is with regard to prices.
The money-lenders and grain-dealers of India keep
elaborate and minute accounts of their transactions,
and the account-books of the firm are often preserved
for two or three generations. My friend and former
pupil, Maulvi Alaul Hasan Sahib, Deputy Collector, has
sent me a record of prices extracted from the account-
books of a grain-dealer in Pilibhit, which goes back to
the year 1812. The settlement officers of an earlier
generation usually consulted the books of the grain-
dealers in order to ascertain the average value of
agricultural produce in the district under settlement,
and these price-lists are often incorporated in their
reports.

The duty of recording prices is nowadays under-
taken by the Statistical Department of the Govern-
ment of India, and every year the Director-General
of Statistics publishes in Calcutta a volume called

291 19 — 2

292 PRICES

• Prices and Wages in India.' This valuable publica-
tion contains, among other matter, the prices of the
most important food-grains in the principal districts
of each province, from the year 1861 to the date of
issue. ' Prices and Wages' may be had in London or
Calcutta for 2s. (R. 1/8), and it is therefore easy for
any student to trace the course of rupee prices in the
last half century for himself. For historical purposes,
however, it is desirable to go back earlier than 1861,
and I have therefore printed in the Appendix such
price-lists as I have been able to collect for the years
before 1861.

For the United Provinces I have not been able to
find any continuous records going back earlier than
the beginning of the nineteenth century — that is
to say, for the period anterior to the establishment
of British rule. There is in existence, however, a
very interesting record of prices in Bengal in the
eighteenth century, and as this record is sometimes
referred to, but has never to my knowledge been
reprinted, I insert it here. Although in many re-
spects the economic conditions of Bengal and the
Ganges Doab have always been different, yet I can
see no reason for supposing that during the eighteenth
century the value of the precious metals differed in
the two provinces ; and, therefore, the table which
is here reprinted may serve as a basis for conjecturing
the value of money in Upper India before the estab-
lishment of British rule.

The table was prepared by G. Herklots, Esq., Fiscal
of Chinsurah, and published in Gleanings in Science, a
Calcutta periodical, which was issued monthly from
1829 to 1831. There is a brief note at the head of the
paper to explain that the table shows, from authentic
documents, the market price of the following commo-
dities in Lower Bengal in one month in each year,
for which generally the month of August was
selected :

EIGHTEENTH-CENTURY PRICES

293

Year.

Rice,
Best Sort.

Rice,
Coarse.

Callai.

Dal.

But

(Gram).

Wheat.

Ghi.

Mustard-
oil.

Cowries.

I700

40

70

60

60

70

30

10

4

32

170I

30

40

60

50

50

30

«4

3i

32

1702

40

60

70

50

70

50

7

3

32

I703

40

60

80

60

60

50

13

si

32

1704

I7°5

1706

60

90

80

80

80

80

6

23

34

1707

I708

—

I709

—

1710

I7II

1712
1714

80

120

120

80

130

90

5*

34

32

1715

40

5°

50

40

70

45

64

2i

32

1716

45

55

60

45

70

45

8

2*

32

I717

40

50

40

40

50

45

7i

4i

32

1718

35

40

35

35

45

35

H

6

32

1719

32

3«

35

30

40

22

H

4*

32

1720

40

45

40

32

40

30

8

3f

32

I721

40

45

40

30

40

25

8^r

3l

32

I722

30

35

37

30

40

25

8|

3h

32

I723

32

35

40

30

50

25

H

3

32

I724

32

40

45

32^

55

274

8|

3

32

1725

1726

40

45

50

30

50

22

9

64

32

I727

I728

22

30

28

30

30

18

84

6i

32

1729

30

40

35

40

40

20

8

64

32

1730

1731

1732

20

35

30

35

45

30

10

6

32

1733

20

35

3°

35

45

30

—

—

—

1734

25

30

25

30

30

20

10 4

6i

32

1735

25

30

25

30

30

20

I of

64

32

1736

24

30

24

30

3°

20

10

5

32

1737

1738

1739

24

30

24

25

28

20

I of

4l

32

I740

25

32

25

24

30

22

I Of

4f

32

I74I

24

31

23

25

27

26

io£

44

34

I742

20

25

18

20

24

20

ni

4l

33

1743

1744

13

16

15

14

16

14

I6i

64

36

1745

14

17

16

16

20

15

15

84

32

1746

28

34

3b

40

43

22

14

5

32

1747

18

22

22

32

40

25

lof

5f

32

1748

26

32

27

34

40

35

12

4i

32

1749

32

I750

40

50

35

45

o5

28

15

4l

32

1751

30

38

39

47

70

40

i6i

94

32

294

PRICES

Year.

Rice,
Best Sort.

Rice,

Coarse.

!

Callai. 1

Dal.

But
(Gram).

Wheat.

Ghi.

Mustard-
oil.

Cowries.

1752

IO

II

.7 !

27

20

14

15

8

32

1753

18

21

13

22

25

20

i5i

9

32

1754

22

32

22

22

23

16

14

54

32

1755

21

33

18

24

30

19

154

7&6

32

1756

23

40

32

42

59

34

15

4f

32

1757

30

42

46

35

42

18

I4i

7 & 2

32

1758

30

37

30

32

28

23

17*

74

32

1759
1760
1 761

28

3i

2l£

164

324

24

174

74

32

I762

26

28

38

35

35

58

I4i

51

32

I763

28

25

28

40

30

20

14

6

32

1764

26

3i

274

28

32

26

i«4

94

32

1765

1766

14

24

184

18

284

16

224

10

32

I767

1768

1769

IO

11

14

13

15

13

26

124

32

I770

3

3*

44

4

I5i

4i

20

14

32

1771

19

24

17

15

18

17

—

—

—

I772

23

34

29

29

35

32

—

—

—

1773

29

31

44

42

50

51

174

3

32

1774

28

32

35

40

55

45

16*

6i

32

1775

23

27

30

36

57

36

154

54

32

I776

24

30

37

3b

42

40

124

54

32

I777

1778

I779

174

25

20

144

42

40

124

54

32

1780

20

30

25

17

45

22

19

10^

32

1781

26

38

30

32

55

28

19

9

32

I782

1783

I784

1785

—

1786

24

25

28

36

44

24

18

134

67

I787

22

25*

34

27

40

30

18

12

66

1788

12

14

16

23

30

19

164

124

74

I789

17

24

25

27

50

24

174

12

72

I790

18

24

24

40

90

25

174

124

68

1 791

16

20

20

30

48

22

—

—

—

I792

17

24

29

25

36

26

—

—

—

1793

17

29

32

29

48

22

—

—

—

1794

26

37

42

54

82

45

—

—

—

1795

1796

1797

I798

1799

1800

1 801

1802

35

38

38

—

58

33

—

—

—

1803

344

40

53

40

44

NINETEENTH-CENTURY PRICES

295

Year.

Rice,
Best Sort.

Rice,
Coarse.

Callai.

DaL [(Gram).

Wheat.

Ghi.

Mustard-
oil.

Cowries.

1804

32

42

53

— 40

40

1805

40

50

35

—

32

40

—

—

—

1806

35

40

42

—

49

53

—

—

—

1807

22^

2&i

45

49

38

—

—

—

1808

33

40

42 |

39

32

—

—

■ —

1809

32

35

33

—

32

34

—

—

—

I8IO

26£

32

34

—

29

26^

—

—

—

l8ll

28

30

22

—

34

24i

—

—

—

I8I2

34

45

33

- ' 58

45

—

—

—

1813

34

40

35

— 32

34 —

The first six articles give the number of seers per rupee, the ghi and
mustard-oil the price per maund in rupees, and the cowries the number of
pans per rupee.

For the nineteenth century we have a record of
prices in the United Provinces, sufficiently detailed
to enable us to form accurate conclusions. The
general tendency of prices is indicated in the two
diagrams on which I have represented the prices of
(1) wheat and (2) barley at Bareilly from 1805 to 1899.
Bareilly is one of the markets for which we possess a
continuous record almost from the beginning to the
end of the century, and it is given here as typical of
the markets of the province. There are several
points in this chart which deserve attention. In the
first place, it is evident at a glance that before the
year 1861 prices fluctuated violently and irregularly,
and that since 1861 prices have been comparatively
stable at a higher level. It is hardly necessary to
point out that this is the natural result of improve-
ment in the means of communication. A small
market, dependent for its supplies upon the crops
of a restricted area, is necessarily subject to violent
fluctuations corresponding with the vicissitudes of
the seasons. Railway communications have so ex-
tended the area of supply that the whole of Northern
India, excluding the mountainous districts, is now
one market for grain. An average price is estab-

296 PRICES

lished over the whole area, and that price is com-
paratively stable, because the deficiencies of one
district are compensated by the abundance of
another. The fluctuations in the price of food-
grains before 1861 further prove beyond a doubt
that large stores of grain were not in those days
kept from one harvest to another. Had large stores
of grain been in existence, some portion of them
would have been attracted to market by high prices,
and so the rise would have been checked. This was
clearly not the case ; the most striking characteristic
of the prices from 1804 to 1861 is their sudden and
violent fluctuations. At Farukhabad, for instance,
the harvests were good in the years 1814, 1815, and
1 8 16, for wheat sold at 45, 48, and 47 seers to the
rupee ; in the famine of the succeeding year the price
of wheat rose suddenly to 15 seers, a rise of over
300 per cent. In modern times that would be equiva-
lent to a rate of about 5 seers to the rupee. How
slight are the oscillations nowadays in comparison
will be seen by a glance at the prices in 1896-97. At
Farukhabad the average price of wheat for the ten
years previous to 1896-97 was 15*8 seers to the rupee.
After the failure of the harvest the price only rose
to 97 seers — i.e., a rise of 61 per cent. If, therefore,
to return to the early part of the century, prices could
rise so high in one year after a series of abundant
harvests, it is impossible to believe that grain was
habitually stored in any considerable quantity. This
conclusion is corroborated by the recorded facts re-
garding famine.

Another very obvious deduction from these figures
is that there is no ground whatever for the curious
belief which exists in Europe that there was ever a
customary price for commodities in India. It is,
indeed, incredible that there should ever have been
a customary price for agricultural produce. Seeing
that the value of agricultural produce necessarily

NINETEENTH-CENTURY PRICES 297

OOGI

0681

0881 •-

0Z8I

0981

0S8I

0*81

0E8I

0281

0181

298 PRICES

varies with the supply of each season, it is impossible
to conceive that the silver equivalent of that value
should have remained constant. From these tables it
is clear that custom did not regulate the price of agri-
cultural produce in the nineteenth century, and we
may legitimately infer that such never was the case
when we observe that the further they were removed
from the great markets of the world and the con-
ditions of modern commerce, the more did prices
vary. I do not know that anybody in India has main-
tained that prices were ever regulated by custom ;
but as the belief exists in Europe, it is, perhaps,
worth pointing out that there is no evidence to
support such an opinion.

These figures throw doubt upon another theory,
which has found its way into some economic litera-
ture. That theory is that the experience of India
demonstrates that silver is a more stable measure
of value than gold. This theory is based upon the
fact that the prices of certain selected exports have
varied but little since 1873. It has already been
pointed out by Mr. F. J. Atkinson* that certain of
these exports, such as tea, opium, and indigo, are
articles of little or no importance in the inland trade
of the country, which is the trade by which silver
prices are determined, and that, therefore, an index-
number based upon the value of exports is not trust-
worthy. This defective index number, however, has
found its way into many Government publications,
and is used, for instance, in the Statistical Atlas pub-
lished by the Director-General of Statistics. Upon
the basis of those figures it is contended that rupee
prices in 1894 had only risen about 12 per cent, in
comparison with the prices for, 1873. This constitutes
the evidence for the theory that silver is a more stable
measure of value than gold. The dispute is, there-

* ' Silver Prices in India.' Journal of the Royal Statistical Society,
March, 1897.

NINETEENTH-CENTURY PRICES 299

3061-

<

J

V

0681

0981

•tf

->

1 1

0581-

^

y

0C8I

0281

-I—

j — i—

0181

"

^tt

5T

o

><

W

<
m

H

W

<

M
O

w
u

2

300 PRICES

fore, reduced to a question about facts. Is it or is it
not a fact that rupee prices have risen in India in the
last century? Upon this question I do not concede
that the prices at i the place of export are sufficient
and conclusive evidence. The price of grain at the
town of export is the sum of two prices — the local
price at which the grain-dealer purchased from the
cultivator and the cost of carriage. Since 1873, the
year with which comparison is made, the means of
transport have been enormously developed, the area
from which supplies are drawn has been proportion-
ately increased, and the cost of carriage has been
much reduced. If the price of grain at the town of
export has not been reduced, it can only be because
the price paid for it up-country has been increased.
That is what the price-lists from the bazaars up-
country show to have been the case. From every
mart the story is the same : the price of food-grains
has moved on to a higher level in the latter half of
the nineteenth century. This can easily be demon-
strated ocularly by averaging the prices of any one
of the food-grains at the various centres for which
records are given (at the end of this chapter and in
' Prices and Wages '), and projecting them upon a
chart. The result will be practically the same as that
shown in the price-curves for wheat and for barley
at Bareilly. I have not printed such a chart, because
for the earlier years of the century the result obtained
by averaging the prices of different centres is fal-
lacious. The characteristic of the old small markets
was instability, indicated by great fluctuations of
prices. If the fluctuations are averaged, the high
prices of one market are neutralized by the low prices
of another, and the result is to show a stability of
price which never existed in any one market. The
average gives an absolutely false picture of the
character of prices in the earlier period. After rail-
way communications had been developed, prices were

PRICES AT TWO CENTRES

301

061

302 PRICES

actually averaged in practice, and very little is gained
by merging them into one provincial average upon
paper. The only way of obtaining an accurate im-
pression of the course of prices through the century
is to take as an example the prices at a particular
market. It will be found that the general character
of such price-curves is very much the same whatever
the market chosen, but for the earlier period the
details will vary very considerably at different cen-
tres. In order to show that the price-chart for
Bareilly is a fair illustration, I print a second chart,
showing the price of barley at two different centres
— Farukhabad and Agra. A glance is sufficient to
show that the character of the curves for these two
centres is much the same, and that both these curves
closely resemble the Bareilly curve. After 1861 prices
moved upon a higher level, with an upward ten-
dency. The curves of all other markets in the United
Provinces exhibit the same characteristic, and I think
it is impossible in the face of these figures any longer
to maintain that prices in the up-country markets
have not risen ; and if this fact is established, it cuts
away the ground upon which is usually based the
theory that silver in India has proved a more stable
measure of value than gold in other countries.

This chart illustrates other features in the history
of prices. The first to which I wish to call attention
is the way in which before 1861 prices varied at two
markets so close to each other as Agra and Farukhabad.
The Farukhabad prices are, on the whole, somewhat
the lower of the two. The reason for this is explained
by Mr. H. F. Evans in the Settlement Report, from
which these prices have been collected. 'The prices
here given,' he says, ' are those ruling on the 18th of
each Baisakh, the Akhtij ka din — that is, the harvest
rate fixed when the nature of the year's crop has been
fully ascertained. It is generally somewhat below the
highest rate obtained throughout the year, but would

PRICES AT TWO CENTRES 303

be considerably above the average struck on the prices
of the twelve months.'* This little note is useful to
anyone studying Mr. Evans's tables with attention,
because it will explain why the failure of the rains in
1837 is not reflected in the price he quotes for that
year, though it is very clearly shown in the famine
price (15 seers to the rupee) of the succeeding year.
The latter half of Baisakh corresponds with the first
half of May, and therefore at the time of deciding the
value of the crop the failure of the rains in 1837 could
not be anticipated.

To return, however, to the prices of Farukhabad
and Agra. Although the two districts are governed
by the same general climatic conditions, the prices
obtained for barley differed in the most marked manner
on several occasions. Thus in 181 3 barley was selling
at 25 seers in Agra, and at 66 seers in Farukhabad.
In 1817 the case was reversed: in Agra the price was
40 seers, and in Farukhabad it had reached the famine
price of 21 seers. The terrible famine of 1837-38 left
its mark equally on both markets; but in 1843 and in
1849 Agra suffered from two local famines, while
Farukhabad was in the enjoyment of prosperity,
indicated by a price of 55 seers to the rupee. The
first of these two cases is the more remarkable of the
two, for the tendency of prices in the two centres for
this year is in exactly the opposite direction. In 1842
the price at the two markets was nearly the same —
Farukhabad 36 seers, and Agra 40 seers. In Faruk-
habad in the following year the price fell to 55 seers,
whereas in Agra the price rose to 20 seers. In 1854
Farukhabad suffered a scarcity which is revealed in
the price-lists by the rate of 28 seers, whereas Agra
was in this year enjoying the abundance indicated by
a price of 50 seers to the rupee. Both districts suffered

* I understand this to refer to the Indian method of estimating
the value of grain — viz., so many seers to the rupee. By this calcula-
tion, a high rate — i.e., many seers to the rupee— means a low price.

304 PRICES

from the famine of 1 860-61, and after that the two sets
of prices kept close together to the end of the century.
A second lesson may be derived from this chart
having reference to the intensity of local famines.
The price-curve of any one market before 1861 makes
no distinction between local crop failure and wide-
spread famine. The great famines of this period —
1 8 19, 1837, and i860 — are clearly marked in all price-
curves, standing up like the great Himalayan peaks,
which are visible from almost any point of view. But
each district had crop failures of its own, which, from
the intensity of suffering they caused within a circum-
scribed area, loomed as large in the memory of the
locality, and in which prices rose as high as in the
great famines; just as in the Himalayas a relatively
small peak which is near at hand seems to rival the
distant giants of the range. So numerous were these
local famines in the first half of the nineteenth century
that the projection of price-curves for several localities
upon one chart gives an impression that high prices
prevailed in that period to an extent which is not in
accordance with fact. These local scarcities are re-
corded in the histories of the districts by settlement
officers, and if from these histories an attempt were
made to record all the famines, great and small, in
which people had died of starvation in the first half of
the nineteenth century, the list would be an amazingly
long one, and the impression would be produced that
famine was almost continuous in these provinces in
that period. From the price-lists given at the end of
this chapter it is evident that famine existed in some
part of the province in each of the following years :
1804, 1809, 1813, 1817, 1818-19-20, 1823, 1826, 1834,
1837-38, 1843, 1849. But of these eleven famines only
three (1803-04, 1819-20, and 1837-38) were widespread,
and under modern conditions of transport these three
only would have made an impression upon the public
of the time.

THE VALUE OF MONEY 305

Let me summarize very briefly the conclusions
derived from a study of these charts. Taking the
decade 1850-60 as the dividing-line between the first
and latter half of the century, the two periods present
the following contrasts :

(1) The prices of agricultural produce fluctuated
violently before 1 850, and attained comparative stability
after i860.

(2) Prices before 1850 were low, and after i860 were
high, with a rising tendency.

(3) Before 1850 prices in different localities fluctuated
independently of each other; after i860 they were all
linked together, and fluctuated simultaneously.

The changes in (1) and (3) need no explanation, as
they are the natural consequence of improvement in
the means of transport, which was, in my opinion,
by far the most important economic event of the
nineteenth century ; (2) requires a more careful
examination.

The value of money in India, as everywhere,
depends upon the supply and demand. By the supply
of money is meant the amount of money in the
country and the rapidity of circulation ; by demand
is meant the number of transactions which have to be
effected by means of money. Both supply and demand,
therefore, present certain factors which it is impossible
to estimate accurately. The rapidity of circulation
has probably increased greatly in the course of the
last hundred years, but we have no means of gauging
it with accuracy. On the other hand, the demand for
money has been increased, firstly, by the growth of
population and the extension of commerce, of which
some estimate can be formed ; and, secondly, by an
increase in the use of money, which we have no
means of computing. That there has been a great
increase in the use of money there can be little doubt.
A very large number of the exchanges within a village
were in old days effected by means of barter. Rents

20

306 PRICES

were paid in kind, and debts between the cultivator
and the money-lender, though reckoned in terms of
money, were usually settled in grain. The wages of
field labourers and of the village artisans were paid
almost entirely in grain, and it was therefore possible
for the cultivator in former days to make a large
number of transactions in the year without employing
money at all. Now that the self-sufficiency of the
village is being impaired, the occasions for the use
of money are largely increased. The tenant usually
pays his rent in money; he also employs mone}^
along with bundles of corn, to pay his labourers ; a
few articles of foreign manufacture are coming into
common use, which are purchased at fairs, and for
these money is the only payment accepted. It follows
from this that the cultivator must receive part of the
payment for his produce in cash, and thus the occasions
for the use of money have been very considerably
increased, but what the extent of that increase has
been it is not possible to determine.

The one factor which is capable of exact arithmetical
computation is the amount of money in the country ;
it is also the factor which has probably been of chief
importance in determining the value. From 1793 to
1893 India was a monometallic silver country — that is
to say, that the Indian mints were ready to coin into
rupees all the silver which was brought to them. The
rupee therefore circulated at the intrinsic value of the
silver of which it was composed. In these circum-
stances an increase in the quantity of silver brought
into the country would tend to depreciate the value
of the rupee; a decrease in the quantity of silver
imported would tend to raise its value. From 1863
onwards paper money (which has always remained
convertible) was issued, but as the total issue, without
coin reserve, probably represents little more than
2 per cent, of the total circulation, this may be
neglected here.

THE SUPPLY OF MONEY 307

The rupee currency of India at the beginning of the
nineteenth century is estimated by Mr. F. J. Atkinson
at Rx. 90,000,000. This, of course, is confessedly only
a rough guess from the very imperfect data available ;
but in the absence of more trustworthy statistics , it
may be provisionally accepted as a starting-point.
Between 1800 and 1835 Rx. 65,250,000 were coined.
From that year onward the figures for the amount of
silver imported and the number of rupees coined are
accurately recorded. The table on pp. 308, 309, is ex-
tracted from Mr. Atkinson's valuable paper printed in
the Journal of the Royal Statistical Society, March, 1897.
In columns 2, 3, 4, and 5 will be found the official
figures for the imports and coinage of silver between
1835 and 1895. Columns 6 and 7 contain the figures
relating to the issue of paper money without a coin
reserve ; these notes are, therefore, additions to the
currency, and constitute a part of the amount of money
in circulation. Column 10 is given by Mr. Fred J.
Atkinson as an approximation only to the truth, and
it must be accepted with reserve as a conjecture. It
shows ' the gradual decrease in the circulation of the
coinage coined before 1835, which ceased to be legal
tender in 1877. Of this coinage about 23 crores is
recorded as having been tendered to the mints for re-
coinage between 1835 and 1876, and, remembering
that the coinage between 1800 and 1835 amounted to
65^ crores, it is a fair assumption that the circulation,
including the cash balance in the Government
treasuries, was 37 crores in the beginning of 1835, of
which 23 crores was recoined, and the balance of
14 crores otherwise absorbed, probably mainly in
ornaments, during the forty-one years it remained
legal tender.' Column 12 represents an estimate of
the actual circulation, after making allowance for
wear and tear, and the quantity annually withdrawn
from circulation for ornaments, etc. This, of course,
is highly conjectural, and is given here with reserve.

20 — 2

3o8

PRICES

THE CURRENCY

1

2

3

4

5

6

7

Year.

Gross

Import of

Silver.

Silver

Bullion

received

into Mints.

Coinage

since 1835 ;

Bullion

and

Old Coins

before 1835.

Coinage to
Date.

Issue of

Paper Money

without

Coin
Reserve.

Issue of
Paper
Money

without
Coin

Reserve

to Date.

Rx.

Rx.

Rx.

Rx.

Rx.

Rx.

1S35

1.833.673

1,410,460

2,329,020

2,329,020

—

—

1836

1,646,840

1,526,332

3,872,189

6,201,209

—

—

1837

2,215,020

2,123,069

3,375,576

9,576,785

—

—

1838

2,850,380

2,337,77°

3,970,619

!3, 547,404

—

—

1839

i,937.°22

2,325,118

3,069,967

16,617.371

—

—

1840

1.707,483

i,932,954

2,924,570

i9,54i,94i

—

—

1841

1,678,086

2,108,035

3,760,264

23,302,205

—

—

1842

3>235.on

3,045,023

3.294.786

26,596,991

—

—

1843

4.743.74°

4,5i6,599

4.672,704

31,269,695

—

—

1844

3,176,048

3,898,958

4,696,814

35,966,509

—

—

1845

i.96i,357

1,820,676

3,856,218

39,822,727

—

—

1846

2,087,082

2,277,038

2,920,852

42,743,579

—

—

1847

922,185

729,422

1,782,257

44,525,836

—

—

1848

2,798,628

2,093,893

2,578,866

47,104,702

—

—

1849

2.235, 792

2,014,906

2,411,208

49,515,910

—

—

1850

2,656,498

2,308,384

2,616,417

52,132,327

—

—

1851

3,713,280

3,725, 9IQ

4,248,491

56,380,818

—

—

1852

5,490,227

5,493,757

5,509,965

61,890,783

—

—

1853

3,770,643

3,409,946

5,253,437

67,144,220

—

—

1854

J, 145,137

553,°57

i,365,9«

68,510,121

—

—

1855

8,792,793

8,291,603

6,973,659

75,483,780

—

—

1856

12,237,695

10,938,404

10,779,286

86,263,066

—

—

1857

I2,985,332

11,305,863

12,551,303

98,814,369

—

—

1858

8,379,692

5,929,730

6,542,267

105,356,636

—

—

1859

12,068,926

9,358,676

10,677,924

116,034,560

—

—

i860

6,434,636

4,025,065

5,192,328

121,226,888

—

—

1861

9,761,545

8,104,169

7,070,830

128,297,718

—

—

1862

13,627,401

11,253,139

9,251,468

I37,549,l86

—

—

1863

i4,o37,l69

9,616,236

11,477,425

149,026,611

+ 684,886

684, 8S6

1864

11,488,320

8,895,241

10,358,423

159,385,034

+ 1,802,392

2,487,278

1865

20,184,407

i4,367,897

14,224,937

173,609,971

+ 1,087,239

3,574,517

1866

8,655,432

5,75o,i97

5,836,754

179,446,725

+ 405,736

3,980,253

1867

6,999,450

4,249,241

4,031,182

183,477,907

- 728,198

3,252,055

1868

9,978,978

5,780,572

3,924,928

187,402,835

—

3,252,055

1869

8,264,408

6,640,712

7.t9i,457

194,594,292

+ 660,951

3,913,006

1870

2,662,237

981,556

1,436,094

196,030,386

- 309,655

3,603,351

1871

8,007,525

4,173, 512

1,408,291

197,438,677

- 376,150

3,227,201

1872

1,934,214

1,899,786

3,698,824

201,137,501

+ 2,682,175

5,909,376

1873

4,143,726

2,669,099

2,087,904

203,235,405

- 215,423

5,693,953

1874

6,051,810

4,694,185

4,614,781

207,840,186

—

5,693,953

1875

3,464,34!

2,008,945

2,517,795

210,357,981

—

5,693,953

1876

9,992,408

7,865,988

6,249,388

216,607,369

—

5,693,953

1877

15,776,532

i7.239,095

16,090,843

232,698,212

+ 304,137

5,998,090

1878

5,593.699

6,557,359

7,i43>189

239,841,401

- 304,844

5,693,246

1879

9,605,001

9,471,786

10,172,035

250,013,436

+ 305,871

5,999,"7

1880

5,3J6,i56

3,185,210

4,088,691

254,102,127

— 2,042

5,997,075

1881

6,466,389

2,213,557

1,547,329

255,649,456

4,657

5,992,4i8

1882

8,358,022

5,137,489

5,764,354

261,413,810

+ 7,579

5,999,997

1883

7,408,506

3,238,623

3>i33>872

264,547,682

—

5,999,997

1884

9,110,025

6,444,363

5,543,849

270,091,531

+ 3

6,000,000

1885

12,386,260

8,969,568

9,823,797

279,915,328

- 250

5,999,750

1886

8,219,761

4,760,299

4,552,896

284,468,224

250

5,999,500

1887

10,589,802

io,525,379

10,313,834

294,782,058

250

5,999,250

1888

10,725,872

6,806,730

6,800,992

301,583,050

247

5,999,oo3

1889

12,388,474

8,047,537

8,217,268

309,800,318

- 17,000

5,982,003

1890

15,433,654

12,624,320

13,051,281

322,851,599

+ 17,995

5,999,998

1891

10,603,733

6,238,673

5,360,014

328,211,613

+ 999,99s

6,999,996

1892

15,228,021

12,140,019

12,509,200

340,720,813

+ 1,000,004

8,000,000

1893

iSi3I4i7*6

4,205,236

4,582,972

345,303,785

—

8,000,000

1894

7,824,927

18,024

43,999

345,347.784

—

8,000,000

1895

8,338.716

—

—

345,347.784

—

8,000,000

Columns 2 to 9 give the official records

OF INDIA.

THE CURRENCY

309

8

9

10

Approximate
Circulation
of Rupees,

11

Total,

12

13

Index
Number
on Basis
of 1871.

14

Net Import

of Treasure

Inland.

Ditto
to Date.

including

Cash
Balance in

Columns

5 + 7+9+1° =

Gross

Estimated

Active
Circulation.

Year.

Treasuries

Circulation.

coined

before 1835.

Rx.

Rx.

Rx.

Rx.

Rx.

—

—

35,000,000

37,329,020

25,310,861

—

1835

—

—

32

,300,000

38,501,209

24,895,928

—

1836

—

—

3i

,000,000

40,576,785

24,967,494

—

1837

—

—

29

900,000

43,447,404

27,504,756

—

1838

—

—

28

500,000

45,"7,37i

27,084,771

—

1839

—

—

27

400,000

46,941,941

27,291,068

—

1840

—

—

25

300,000

48,602,205

27,155,489

—

1841

—

—

24

500,000

51,096,991

26,244,289

—

1842

—

—

2.;

500,000

54,769,695

25,783,562

—

1843

—

—

21

800,000

57,766,509

24,982,947

—

1844

—

—

20

700,000

60,522,727

26,990,322

—

1845

—

—

19

500,000

62,243,579

24,496,671

—

1846

—

—

18

500,000

63,025,836

23,204,051

—

1847

—

—

17

900,000

65,004,702

19,960,084

—

184S

—

—

16

900,000

66,415,910

17,417,258

—

1849

—

—

15

700,000

67,832,327

15,912,689

—

1850

—

—

14

500,000

70,880,818

13,910,605

— ■

1851

—

—

13

500,000

75,390,783

14,882,095

—

1852

—

—

12

500,000

79,644,220

17,006,394

—

1853

—

—

11

300,000

70,810,121

18,514,590

—

1854

—

—

10

500,000

85,983,780

19,571,300

—

1855

—

—

9

500,000

95,763,066

26,254,659

—

1856

—

—

8

600,000

IQ7,4i4,369

36,964,661

—

1857

—

—

7

900,000

113,256,636

47,509,879

—

1858

—

—

5

300,000

121,334,560

50,321,998

—

1859

— ■

—

4

800,000

126,026,888

55,810,862

—

i860

—

—

3

800,000

136,097,718

57,183,821

51

1861

—

—

3

300,000

140,849,186

64,468,467

57

1862

—

—

3

000,000

i52,7II>497

77,602,002

69

1863

—

—

2

200,000

164,072,312

91,407,297

81

1864

—

—

1

800, 000

178,984,488

108,255,462

96

1865

—

—

1

600,000

185,026,978

II3>527>955

100

1866

—

—

1,

400,000

188,129,962

"5,370,858

102

1867

—

—

1

200,000

191,854,890

119,631,233

106

1S68

—

—

1

000,000

199,507,298

124,215,944

no

1869

—

—

800,000

200,433,737

118,360,881

i°5

1870

—

—

600,000

201,265,878

1I3>I27,322

100

1871

—

—

400,000

207,446,877

IIi,394,5I6

98

1872

—

—

300,000

209,229,358

110,719,184

98

1873

—

—

165,000

213,699,139

114,502,090

101

1874

—

—

115,000

216,166,934

110,268,053

97

1875

—

—

90,000

222,391,322

110,898,953

98

1876

+ 93,220

93,220

—

238,789,522

127,882,331

113

1877

+ 94,212

187,432

—

245,722,079

130,823,873

116

1878

+ 219,166

406,598

—

256,416,151

I36,o75,5oi

120

1879

+ 255.535

662,133

—

260,761,335

J37,079,748

121

1880

- 21,714

640,419

—

262,282,293

135,418,684

120

1881

+209,996

850,415

—

268,264,222

136,068,117

120

1882

-198,588

651,827

—

27i,r99,5o6

136,637,204

121

1883

+292,217

944,044

—

277,035,575

138,298,508

122

1884

+206,454

1,150,498

—

287,065,576

H4, 765,845

128

1885

+ 164,886

i,3I5,384

—

291,783,108

ms^^^1

127

1886

+413,333

1,728,717

—

302,510,025

146,681,704

130

1887

+ 704,059

2,432,776

—

310,014,829

148,076,249

131

1888

+ 49,125

2,481,901

—

318,264,222

156,261,197

138

1889

+ 130,006

2,611,907

—

331,463,504

162,559,570

144

1890

+134,460

2.746,367

—

337,957,976

161,882,324

143

1891

- 2,166

2,744,201

—

351,465,014

168,055,176

148

1892

+ 47,217

2,791,418

—

356,095,203

166,904,139

147

1893

/+ 77,302\
l+9°5,344 1

3,774,066

-

357,121,850

161,851,025

143

1894

i - 64,189 i

( +723,472/

4,433,349

- J

357,78i,i33

164,906,884

146

1895

concerning the imports and coinage.

3io PRICES

The main facts in the history of the currency are as
follows : The average annual coinage between 1800
and 1835 was Rx. 1,860,000; in the succeeding twenty
years — i.e., from 1835 to 1854 — the average annual
coinage was a little over Rx. 2,581,000. After that year
the imports of silver and the coinage of rupees in-
creased rapidly. In 1856 12 crores of silver were
imported and 10 coined. In 1861-65 amounts of 13
and 14 crores were imported annually, rising in 1865
to 20 crores of silver imported and 14 crores coined.
As the century drew to its close the amounts imported
and coined steadily increased up to the end of 1893,
by which year the total coinage of the nineteenth
century (i.e., of ninety-three years) had reached the
enormous total of Rx. 410,000,000. It will be seen from
the tables that the gross coinage from 1800 to 1854
was Rx. 133,670,000, whereas in the next forty years
the gross coinage amounted to Rx. 276,793,000, or
rather more than double that amount. It would have
been contrary to all experience and reason if this
enormous increase in the supply had not caused a fall
in the value of money — that is to say, if it had not
produced a rise in prices. What the actual circula-
tion was at the three dates 1800, 1854, and 1893, we
can only conjecture. A certain amount of coin in all
countries is lost or destroyed, and thus withdrawn
from circulation. Moreover, when the rupee circu-
lated at its intrinsic value, coins were probably
melted down in considerable quantities, to be made up
as ornaments. The accumulation of jewellery has
usually been considered a form of saving in India,
and as long as the rupee had no higher value than
so many grains of silver, it was at least as prudent a
habit as the French peasant's practice of hoarding coins
in a stocking. For these reasons the amount of coin
withdrawn from circulation was probably large, but
the exact quantity can only be conjectured. Mr.
Fred J. Atkinson has published, in the paper referred

DEPRECIATION OF MONEY 311

to above, an estimate of the active coinage for each
year from 1835 to 1895, which I have included in the
table ; but all conclusions based upon it should be
accepted with reserve, because the estimates of 'coin
hoarded ' and ' coin melted into ornaments,' upon
which it is in part founded, are no more than con-
jectures, though ingenious conjectures. I am inclined
to believe that, however much uncertainty may attach
to the particular figures, the general tendency of the
currency is rightly estimated. There is some evidence
to show that there was an appreciation of money in
the years between 1835 and 1854. I have come across
complaints by district officers of the scarcity of coin
during this period, and the general course of prices
in the first half of the century is certainly not up-
wards, though too much reliance cannot be placed on
the evidence from the price-lists at our disposal,
because the years 1847, 1848, and 1849 were years of
exceptionally abundant harvests in most districts.
The rapid expansion of the currency which Mr.
Atkinson estimates after the year 1856 is certainly
corroborated by the price-lists, and I am disposed to
accept his general conclusions, because they are in
such close harmony with the results which are arrived
at by the examination of phenomena which he did not
investigate.

I have attempted to show that the returns of the
up-country markets prove that a marked rise in prices
took place after the decade 1850-60; that rise is
sufficiently explained by the great expansion of the
currency which followed as a natural consequence
upon the great discoveries of the precious metals in
the middle of the century. There may have been
other contributing causes, but this cause is in itself
sufficient to account for a very considerable deprecia-
tion of the rupee. It is sometimes argued that the
rise in the price of food-grains is due to the export to
Europe, to which rice and wheat are sent in consider-

312 PRICES

able quantities ; but the figures which I have chosen
to illustrate the course of prices refer to barley, which
is not exported in any quantity. Indeed, the rise in
price has been more marked in the case of the cheaper
grains, such as barley, jowar, and gram, which are not
exported, than in the case of wheat. This indicates
that some general cause has been in operation affect-
ing all food-grains, and that the rise of price cannot
be attributed to the European demand for rice and
wheat.

On the whole, I am inclined to think that Indian
prices in the nineteenth century offer a remarkably
good illustration of the quantitative theory of money.
When the number of rupees in circulation was com-
paratively small, the value of money was high and
prices were low ; when the circulation expanded,
the value of money fell and prices rose. Silver, in
fact, acted as a measure of value, exactly in the manner
which was to be expected, and showed no greater
stability than could have been expected of any other
metal. I do not contend that silver might not have
proved a more stable measure of value than gold, if it
had remained in general use throughout the world ;
I only contend that when the supply of it was very
largely increased, and the demand for it (as currency)
much diminished, the value of it in countries like
India, which kept their mints open, tended to fall.
This fall in India was arrested by the closure of the
mints. Since that event India has entered upon a
new phase of her monetary history, and the rupee
now circulates at an artificial value, which is fixed,
not by natural causes, but by the discretion of the
Government.

APPENDIX TO CHAPTER XII
PRICES BEFORE 1861

314

PRICES

WHEAT.

PRICES

M IN

o ' o

» 00

1
1

CO

o

00

o

O I o o

X) |oo 00 j

0

0
M

0
a

00

N 1

J~j

6l

34
11

35
56

32

39
21

22
23

37

42

45
30

26

35

5''

1
00 j

0

X

00

J-}
w

00

—

O

M
JO

00

N
N

00

tn

N
00

19

JO

24

N

26

0
»

15

1 i
r-~ 00

30 00 |

, 1
l63I|

Fatehpur

Cawnpore

Etawah

Etawah,

Auraiya

Farukhabad ...

Agra (i)

Agra (2)
1 Ajmer ...
j Muttra
1 Aligarh

I Bareli

j Bareli, Kror ...

Bareli,

Faridpur

Sarauli

Bisalpur

Nawabganj ...

Pilibhit

Jalalabad,
Muzaffarnagar
Shamli,
Muzaffarnagar
i Muzaffarnagar

-

47

44

] i

1

4536

43

44

38

36

52

51
65

48
41

47

34

15
28
28

*

23

IS
18

2021
1717

4°
26
27
16
24

44

43
30
30
2]
28

33

55

27 30
2431

41

27

27
19
20
21

20
20
22

15
21
22

25
20

33
57

33
30
31
27
31
35;
48

—

—

—

19

25

46

-

35
46

35
49

28

54

23

37

33
39

42 j j

75|38

10 */,*/

I4I5'.I3

21 l8l8

24J3I ^

21 20I7

25i33|26

—

—

73

56

26

23

18

32

43

31

24

23

49

55

32

43

39

25

34

54

54

30
46

26

27

23

1 8

26

40
28

32

34

20
40

37
47

30

45

3"
3°

28
35

—

—

_

—

—

—

—

—

—

1

—

30

23

24

23

34

40

47

46

3C

35

4G

BARLEY.

Fatehpur

Cawnpore

Farukhabad

Agra (I)

Agra (2)

Muttra

Bareli ..

Faridpur

Sarauli

Nawabganj

Pilibhit

Jalalabad
Shamli

...

...

—

-

69

5«

59
67

—
47

75

58

73

63

85

39
51

—

39

57

78
no

77
5i
95

66

-5
31
53

62

45
52
96

74
62
62
Gi
"3

73

55
36

5"
87

21

39
40

3'*
66

28
22

23
29

34

28
22
23
30
36

28
21
22
21
36

40

37
18

4"
66

-1-
'28
6321
4635
4735
4636
8346

35
48
44
44
40
00

35

55
30
3b
31
66

19
38

24
26
26

33

26

21

->

35
33
35

00

50
69
39
43
4S
90

05

...

35

1
5070

70

75

56
40

50

|

WHEAT AND BARLEY

3i5

BEFORE 1861.

WHEAT.

J

0

»-t

N

ro

■*

«

vO

t~^

00

(7\

0

1-1

N

ro

■t ioo'n

30

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0

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m

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10

r-~,oo

ov

0

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m

m

rn

PO

m

"I

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rO

";

-0

<+

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tt-

10

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"i

10

in

"->

iry in

10

0

00

S)

00

00

30

00

00

00

00

OJ

00

w

00

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00

00 00

1

CO

M

00

00

00

00

00

00

00

X

00

CO

00

X

00

22

22

26

22

21

21

20

19

21

19

18

19

22

25

2321

22

24

27

30

25

1

33

27

26

30

28

2b

28

24

19

14

20

20

22

25

29

2726,25)—

— •

—

—

—

—

2b

23

27

3°

31

32312730

—

45

42

47

31

29

30

28

34

28 33

30

25

31

35

37

31 28128 30

i '

40

40

50

53

40

30

31

40

3 4

27 2b

28

25

37

32

34

45

38

27

48

34

30

14

34

29

,7

2b

35

32323436

44

48

42

44

45

34

25

\o

34

29:33

31

24

3*>

34

31

34

31

2529

32

23

13

20

1

1 1

—

1

3635

31

34

31

25 30

32

23

14

20

23

30

3i

15

3127:2729

29

14

35 25

27

26

29

30

35

2223

23

20

2526

26

32

25

12 17

22

22

18

17

II

15

19

20

18 18 ig 19

14

14

18J21

22

14

27

24

24

2bi27

24

18

30

37

32

|i

31

2736

—

—

23

25

28

30

303413231

30

37

40J41

28

29

30

40

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—

39

40

35

37

—

— j —

—

—

—

—

37 36 33 33

46,43 35 37

34

3«

46148

29 28

—

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— —

—

56

4(,

38

28

40

32 31

34

24

17

22

29

29

5«

41

44

43

49148

5230

41

34

46

37146

49

38

— ■

—

—

~

■ —

lb

22

22

44

3i

34

32262733

32

36

3639

23 31

zb

35

28

35 37

29

20

50

—

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19

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31

30

4345

36394251

51

5i

49131

30

39

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57

31

5138

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2b

19

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30

25

35

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20

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40

25

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60

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22

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35282827

! 1 1

3«

24

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35

30

32122

1

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20

26

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BARLEY.

— 30

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51)44 25
70,40 40

47i34 17

50)40155 90 35 5050 95^0 70)70,40
45'6ol4bibo! 5235)52 60,55 40'55)5o

.16

PRICES

PRICES BEFORE

GRAM.

o

00

CI

O
CO

rn

a
co

o

co

10

O
X

•8

00

0
00

co
O
X

0
0

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0 «

CO 00

CI
30

so

X

t-t

co

0

M

00

CO

co

19
23
20

25

Oi 0

CO CO

1

21 20
23 22

20 20
25 58

l-H
CI

CO

N

CI

co

CM

CO

•3- lO
N N
00 CO

CI
CO

00

Fatehpur ...
Cawnpore
Agra

Muttra ...
Aligarh . . .
Faridpur ...
Sarauli
Nawabganj

Pilibhit ...

Jalalabad . . .
Shamli

—

23

27

50

1

32

30
31

26
28
29

75

34
38

35
47

27
40

43
43
44

16
24
-'5
19

45

37

35

21

34
36
30
51

/39\

\28j

45

50

35

29

38

07

48

49

21
23

33
37
38

48
48

49

39
40

34

47

49
44
47

37
32
33
33

70

|

60 60

2328

1

32

60
45

Farukhabad
Agra (1) ...
Agra (2) ...
Aligarh ...
Kror, Bareli
Jalalabad .
Shamli

JUAR.

82

62

6943

1

44

52

38

45

52

60
43

5^
25

55

40

62
58
59

47
48

49

17
31

32

17
21
22

22
21

22

24
19

19

53
32
33

37
37
37

26
29
29

43
38
38

47

69

3°
31

37

40

24
24

20

30
35
35

5°

50

BAJRA.

Agra (1) ...
Agra (2) ...
Aligarh ...
Bareli

Kror, Bareli
Faridpur ...
Nawabganj
Bisalpur ...
Jalalabad ...

53
53

93

45 32
4533

19
20

33

40

35
3&

32

73

37
38

69

45

40

29
30

29
55

35

36

37

48

45

40

28

29

50

29

25

23
24

26
20

30
30

30

50

1 |

20

24

22

38

61

76

—

69 57

58

48

—

95

37

66

60

1 1

35

35

1 : 1

1 >

30

1 i 1

GRAM, JUAR, AND BAJRA

3i7

361 — continued.

GRAM.

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00000000000000 00 00

28

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36 I50 45

46 J56 5I

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84 64

29
25
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3231 222322
34)33 2132 28

47'38;28!36|4i

61423246!

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45I2850

2728273236
31 27292838
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——25

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35J2840J2924
— 22303334

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—I— I— 1—242331

31 30 31 31 31 42 53'

32 36 36 — — —
5038.40 3429! 15
35'40:44 34 25;4i
44 4537 4oi4il40
4548;57:62;5il5i

32 22 27 27J30J22I22 27U5

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54 6336
5M0 43

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31 401352833

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7532
3947

2632
2723
30 —

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38555442

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27:28 25

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45 4165
3042137

386240140

32,32.70;35
363613628

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5°32,49

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29 4639

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3435,55
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60 50 —

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34324848164
— 3838,4240
21 35 3136

62'55!69!48

45 34j45|4o!40i9 42
41 39,38 30 55 64
48 3840 72^8 70
403529253550
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5940

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37

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70

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55

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33 36 36|43|6l 56 30 29

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— 33'32'28 38:38140 39 32 38 38 36l6oJ5o|5o
16 56 38 34|5i|57j5i 4° 5i 78 57 76
27 30:— — 37 30J3I 35|42

— 266o43'4i;6o5oj63 5633 6080
35.20 45 5035 30 25 30:25|3535J35i35l40!3o;2S 22

35354046

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284032

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312136148
— 50|46|8o
35 25!4o'40

34

21 21

35 8o
6035
5138
4628
33 46
—'28

2613

4536
28 11
7620
13 13
5033

25iIO

:i8 PRICES

NOTE TO PRICE-LISTS.

I append below the authorities from whom I have taken the various
price-lists in the foregoing table. In the majority of cases they have
been taken from the reports of settlement officers, who have usually
derived their information from the account-books of the local grain-
dealers.

The records appear to me to differ in value. The prices returned
for Fatehpur and Cawnpore appear to me to be unaccountably high ;
they have, besides, a suspicious steadiness which is not characteristic
of the most trustworthy price-lists. The high prices of Ajmer are
noticed by the settlement officer, who remarks that ' high prices were
caused by deficiency here.'

I have placed side by side two independent records for Agra. The
very slight difference between them may be due to the fact that one
dealer may have effected heavier sales in the dear months than the
other, and therefore his total for the year would show a higher
average ; and, indeed, the difference may be accounted for by several
plausible explanations. On the other hand, the close agreement of
the two independent records affords a strong presumption of their
trustworthiness.

I should select as particularly characteristic and trustworthy the
price-lists for Farukhabad, Agra (2), Aligarh, Bareli, Pilibhit, and
Muzaffarnagar :

Fatehpur : ' Statistical Report of the District of Fatehpur.' C. W.

Kinloch, 1852.
Cawnpore : ' Statistical Report of the District of Cawnpore.'

R. Montgomery, 1849.
Etawah : ' Report of the Settlement of the Etawah District.' C. H. J.

Crosthwaite, 1874.
Etawah, Auraiya : ' Report of the Settlement of the Etawah District.'

C. II . J. Crosthwaite, 1874.
Farukhabad : ' Report of the Settlement of Farukhabad District.'

H. F. Evans, 1875.
Agra (1) : ' Report of the Settlement of Mainpuri District.' C. H. J.

Crosthwaite, 1875.
Agra (2) : ' Report of the Settlement of the Agra District.'
Ajmer : ' Report of the Settlement of Ajmer and Mhairwarra Districts '

J. D. LaTouche, 1875.

AUTHORITIES 319

Muttra, 1813-35 : ' Report of the Settlement of the Muttra District.'

R. S. Whiteway, 1879.
Muttra, 1840-56: 'Report of the Settlement of the Mainpuri District.'

C. H. J. Crosthwaite, 1875.
Aligarh, 1804-32 : Asiatic Society Journal, vol. Hi., p. 621. Edward

Stirling, taken from the ' Kotwali Records of the Town of

Coel.'
Aligarh, 1844-53 : 'Aligarh Statistics' (1803-56). J. R. Hutchinson.
Bareilly : ' Report of the Settlement of the Bareilly District.' S. M.

Moens, 1874. (The weights here are in seers ; 1 seer = 2 pounds

avoirdupois.)

Kror : ' Report of the Settlement of the Bareilly District.' S. M.

Moens, 1874, quoted in the Revenue Reporter, vol. ii., p. 173.

(The weights are in the Bareilly a pakka seer = 2*68 pounds

avoirdupois.)
Faridpur: ' Report of the Settlement of the Bareilly District.' S. M.

Moens, 1874. (In seers, estimated at 2 pounds avoirdupois.)
Sarauli : 'Report of the Settlement of the Bareilly District.' S. M.

Moens, 1874, quoted in the Revenue Reporter, vol. iv., p. 231.

(In Bareilly seers.)

Bisalpur : ' Report of the Settlement of the Bareilly District.' S. M.
Moens, 1874. (The seers are estimated at 2 pounds avoirdupois.)

Nawabganj : ' Report of the Settlement of the Bareilly District.
S. M. Moens, 1874, quoted in the Revenue Reporter, vol. v.,
p. 183. (In Bareilly seers.)

Pilibhit : Collected for me by my friend and former pupil, Maulvi
Alaul Hasan Sahib, B.A., Deputy Collector, from the account-
books of Jai Ram Das and Zoki Ram (brothers). (The weights
are given in the Pilibhit seer =105 Government rupees, the
ordinary reckoning being 1 seer = 80 rupees.)

Jalalabad : ' Settlement Report of the Ganges Canal Tract of the
Muzaffarnagar District.' Allen Cadell, 1878.

Shamli : ' Settlement Report of the Muzaffarnagar District.' S. N.
Martin, 1866.

Muzaffarnagar : ' Report on the Permanent Settlement of the Western
Pargannahs of the Muzaffarnagar District.' A. Cadell.

The three last price-lists from the Muzaffarnagar district will be
found together in the 'Settlement Report of the District of Muzaffar-
nagar, 1882.'

INDEX

Abui, Fazi,, 160
Act XII. of 1SS1, 70

X. of 1859, 67, 6S
Agra, Canal, 163

prices at, 302, 303
Agricultural Association, objects
attained by, 169
Organization Society, 168
Agriculture, importance of, in
India and England, 12
the efficiency of Indian, 210
Agriculturists' Loans Act XII. of

1884, 156
Alaul Hasan Sahib, B.A., Maulvi,

291, 318
Alexander, E., Settlement Officer
of the Moradabad District, 188 1,

43, 5i. 52. 53. 54,55
Aligarh, disorganization at the
time of the conquest of the
district of, 36
early fiscal history of, 33,

34, 35

increase of population and
cultivation in, 36

statistics from 1803 to the
present time, J. R. Hut-
chinson, 1856,41, 318

transfer of landed property

in. 35
Aiual-dari, 43, 46, 47
Amroha, 55, 56, 59, 61
Artisan, inefficiency of the labour
of the Indian, 183
manner of life of the Indian,
182, and Appendix to
Chapter VIII.
Artisans, changes in the remu-
neration paid to, 181
method by which the village
remunerates the, 17S
Asiatic Society Journal for prices,
3iS

Assessment follows the rents

actually paid by tenants, 37

tests of the severity of an, 34,

35
Assessments excessive in the first
quarter of the nineteenth
century, 35
of the Land Revenue, 31
Assets, 18, 19

surrendered to the pro-
prietors, 31
Atkinson, F. J., 298, 307, 310, 311

Baden-Powell, B. H., 19

Baird Smith, Colonel, 260, 265,

268, 269
Balfour, T., 26

Baniya, 219, 220, 221, 228, 229. 261
Banjarahs, 41

Banks, agricultural, 10S, 109, no
Barber, 177, 178
Bareilly, prices of wheat and

barley at, 295
Barter, number of exchanges

effected by, 305, 306
Baru, relief of famine at, 264
Batai, 43, 44, 45, 46, 47, 48, 49, 52,

53, 55
advantages found by Mr.

Moens in, 52
disadvantages of, 47, 49, 50,
51,52
Belgium, co-operative societies

hi, 16S
Betwa Canal, 164
Bhartpur, relief of famine at,

264
Biaha, 45

Bilsi, Badaon district, 253
Blacksmith, 177, 17S, 179
Blacksmiths, wages of, 81
Bounty upon grain imported,
259

321

21

322

INDEX

Bulandshahr, 71

Bundelkhand Land Alienation
Act, 1 16, 128

Cadell, Allen, 318
Campbell, Sir George (President
of the Famine Commission of
1S66), 257
Canal, Bijnor, 161, 164
Dim, 161, 164
Rohilkhand, 161, 164
Canals in the Naini Tal district,
161
irrigation, in the United

Provinces, 160, 161
protective value of, 162, 163
Capital, agricultural, Chapter VII.
food not to be reckoned as,

84, 85
for agricultural improve-
ments, 166
remedies for the tenants'

want of, 156
supplied by the tenant, 150
the small farmer's want of,
149
Capitalist organization of in-
dustry, 1 87
Carpenter, 177, 178, 179
Carpenters, rise in the social
status of, 182
wages of, 181
Ceded and Conquered Terri-
tories, 8
Cesses imposed to bring up the
rents of those paying light
rates, 44, 45, 48
Chamar, 198

employment and wages of

the, 194, 195
the perquisites of the, 179
Chinsurah, prices at, 293, 294,

295
Colebrooke, Sir J. E., 27, 28
Communication, imperfection in
the means of communica-
tion, 183
means of, 215, 227
Competition, 16

for land, 40 et seq.
for land between parties who
negotiate on equal terms, 60
Co-operation, want of capital
overcome by, 166
where to begin in India, 171
Co-operative bacon-curing fac-
tories in Denmark, 168
Credit Act, 1904, 126

Co-operative credit associations,
117, 120, 122, 123, 125, and
Appendix to Chapter VI.
dairies, 169

dairies, possibility of the
introduction into India,
170
Societies, number of, in
Denmark, 168
Cottiers, 14

Credit, easy credit a cause of

indebtedness, 107, 108, 109,

no

necessary to agriculturists

everywhere, 86 et seq.

Crooke, William, 178, 181, 191,

230, 234
Crosthwaite, C. H. J.: Report of
the Settlement of the Etawah
District, 1874, 317, 318
Cultivator, conservatism of the
Indian, 211
the domestic arrangements

of, 233
the house of the smaller,
232
Currency, the Indian, 308, 309,

310, 311
Custom, the economic condition

of India governed by, 180
Customary price, 296, 298

Dairies, Danish co-operative, 167
Denmark, exports of butter from,
167
success of co-operation in,
167
Depopulation of the country at
the beginning of the nineteenth
century, 24, 25
Dhala, 46, 47, 48
Dholpur, relief of famine at, 264
Distributing agencies, absence

of, 183
Division of labour, 174

the possibility of exchange
which gives occasion to
the, 175
Doab, insecurity of the, before
the construction of canals, 163

Eastern Jamna Canal, 163
Ejectments due to good harvests,

73-75
Employment, irregularity of, 193,

194
Englishman, newspaper, account

of famine in 1837 in, 262

INDEX

323

Entrepreneur, 5, 208, 209, 214
the artisan himself the, 187
the Indian cultivator dis-
charges the functions of an,
209
Evans, H. F. : Report of the
Settlement of Farukhabad
District, 1875, 317
Settlement Officer at Agra,
302, 303

Famine, diversity of occupation
the only radical cure of, 284,
285, 286, 290

histories, 246

inefficacy of private charity
during, 264

of 17 18 (Chowtro), 244

of 1747 (Tulotero), 244

in Bengal, 1769-70, 245, 247,
24S, 249, 250, 251, 253

of 1783, the Chalisa, 242, 244,
245, 252, 255, 256, 257, 259,
260, 261

of 1790-92 (Doji Bara), 244, 245

of 1803-04, 243, 252, 258, 259

of 1837-38, absence of vegeta-
tion in the, 261

of 1837-38, 242, 252, 260, 261,
262, 263, 264, 267

of 1860-61, 268, 269

in Orissa in 1866, 255

of 1896-97, 270 et seq.

= the interruption of the agri-
cultural industry, 240, 241
Famine relief, principles of, 272,

273, 279, 280
Famines, Chapters X. and XI.

Commission of 1S80, 284

local, 304

of the eighteenth century,

244, 245
in the United Provinces from

1783 to 1853, 252
prominence of present-day,
242
Faqir, 177, 179
Farmers of the Revenue, 20
Farukhabad, prices at, 296, 302,

333
Firoz Shah Tughlak, 160
Fixitv of tenure, 20, 79
Fly-shuttle, 185, 186

Ganges Canal, Lower, 163

Upper, 163
Gazette, the Calcutta, May 13,
1784,257

Ghi, 170

Girdlestone, C. E. R. (historian of
the North - West Provinces
famines), 246, 254, 256, 258, 260
Gleanings in Science, 292
Gokak, 245

Grain carried by private trade in
times of famine, 271
dealers, prices recorded in

the books of the, 291
examples of the immobility

of, 260, 269
the storage of, 296
Grand Trunk Road, disorganiza-
tion of the, 269

Habhuras, 41

Hand-weaving factories, 188

Harvest, low prices after the, 217
prices, reason for the lowness
of, 228

Hastings, Warren, 258

Havell, Mr., Principal of the Go-
vernment School of Art in Cal-
cutta, 184, 186, 1S8

Herklots, G., Fiscal of Chinsurah,
292

Hutchinson, J. R., author of
'Aligarh Statistics, 1803-56,' 318

Immobility of grain in the begin-
ning of the nineteenth century,
247, 251, 253, 254, 265
Indebtedness, agricultural, 113
caused by land banks, 1 10
due to loans for family pur-
poses, not to improve-
ments, in
of the Indian peasantry not

exceptional, S5
of the peasantry and unem-
ployed capital in India, 107
of the peasantry in Austria,

S9
of the peasantry in Denmark,

92
of the peasantrv in Europe,

87
of the peasantry in Europe

and India compared, 105
of the peasantry in France, 89
of the peasantry in Germany

(Prussia), 90
of the peasantry in Italy, 92
of the peasantrv in Norway,

90
of the peasantrv in Sweden,

90

21 — 2

324

INDEX

Indebtedness of the peasantry in
Switzerland, 91
remedies for agricultural,
Chapter VI.
Industrial organization of Europe,
176
of India, 2, 7

of India and Europe con-
trasted, 3, 4, 7
Interruption of the building in-
dustry, 239
of the cotton - spinning in-
dustry, 239
of industry, 239

very prolonged in India,
241
Irrigation, Chapter VII.

Commission, 1901-03, 154 et

seq., 282, 284
works, area irrigated by large,
161
constructed by private

individuals, 150
constructed by the State,

159, 160 et seq.
loss to the State from,

164, 165
profit to the State from,

161, 164
value of the crops raised
by means of, 162, 165

Jalali, 24, 25

Jessore, famine at, in 1770, 249

Jhils, 154

Kankut, 43, 46, 49, 57

Keene, G., the historian, 257

Khakiuna, 45

Kliarch, 44, 45, 4S

a cess different from the vil-
lage allowances, 45

Kinloch, C. W., author of 'Sta-
tistical Report of the District
of Fatehpur, 1852,' 317

Koi'l, 24, 25

Kunch.lowpricesinparganna, 215

Labourer, condition of the da}-, 193
Labourer, employment open to
the field, 192
the field, 189, 190
in Europe, 4
in India, 4
Laissez faire, abandonment of the

doctrine of, 157
Lakes Jhansi and Hamirpur, 161,
165 "

Land Alienation Act XIII. of 1900,
116
Improvements Loan ActXIX.
of 1883, 156
Landlord and tenant, antagonism
between, 71, 75, 76
different names for, 26
economic position of the In-
dian, 39
improvements rarely made by

the, 149
proprietary right of the In-
dian, 21
rights of the, 66, 72
Land nationalization, 19, 21, 30
ownership, economic doctrine
of, 19
Land-ownership, Indian theory of,

3°
English conceptions of, 18,

19, 22, 30
Indian conceptions of, 18, 19
profits of, 39
Land, price of land in the United
Provinces, 39
private property in, 17, 18, 21
revenue, 18, 19

a tax on rents, 38
alleged elasticity of col-
lection in early days of
the, 34
not rent, 21

now equivalent to 50 per
cent, of the landlord's
assets, 37
method of assessing the,

37
oppressiveness of the
early assessments of, 3 1,
34- 258
proportion of landlord's
income claimed as, 38
tax v. land revenue, 22, 30, 3S
tenure, English conceptions
of, 72
Indian conception of, 26,

80
Indian system of, 39
La Touche, J. D. : Report of the
Settlement of the Ajmer and
Mhairwarra Districts, 1875, 3T7
Lawrence, John, statement re-
garding the famine of 1837, 261
Loans advanced by the State for
land improvement, 156, 157,

suggestions for popularizing
agricultural, 158

INDEX

32?

MacDonnell, Sir A. P., 270, 272,

279, 280, 283
Machinery, agricultural, 213
Mackenzie, Holt, 102, 105
Mahajan. See Money-lender

the good house of the, 232
Mainpuri, 35

prices in, 222

Report of the Settlement, 31,

32, 33. 35
Mallet, Sir L., 21
Market, Northern India one

market for grain, 173, 216
Martin, S. N., 318
Masons, wages of, 1S1
Metayer tenure falling into des-
uetude, 53
tenure, 43

tenure weakens the incentive
to industry, 48, 49
Mill, James, the historian, 243,

245
Moens, S. M., 318

Settlement Officer of the
Bareilly District, 1874, 49,

51
Monevlender, Chapters V. and
VI.
usurer, or capitalist, S2, 101
Money, the demand for, 305

the supply of, 305, 306, 307,
308, 309, 316
Monkeys, nuisance from, 231
Mortgage debt, increase of value
of land followed by an
increase of, 114
the peasant deprived of his
power to, 113, 116
Montgomery, R., author of
' Statistical Report of the Dis-
trict of Cawnpore, 1849,' 317
Mortality during the famine of

1896-97, 280, 2S1
Mot a, 151

Murshedabad, famine at, in 1770,
248, 249, 250

Nazar, 45
Newnham, H., 2S
Non-occupancv tenants, 77, 78,

79,80
North - Western Provinces and

Oudh, 8

Occupancy rights, 67, 69, 72, 73,
'79,80
growth of, 76

Occupancy rights, methods
adopted for preventing the
accrual of, 73, 75, 78
tenants, 72, 73, 74, 77, 78
number of, 58

Parohit, 177

Patna, famine at, 24S, 249

Pauper, description of an Indian,

196
Permanent settlement, hopes
entertained of a, 22
in Bengal, 23, 28, 65

defects of, 27
in the Ceded and Con-
quered Territory, 23, 24,.
26, 28, 29
reasons for postponing a,

25
Plough, the Indian, 213
Ploughing, reasons for shallow,

214
Plunkett, Sir Horace, So, 81
Poor-houses, 276, 279
Population of England and Wales,.
11
of the United Provinces, 10
Potter, 177, 178, 179
Pratt, E. A., author of 'The
Organization of Agriculture,'
168, 170
Price, bazaar, 216

harvest, 216
Prices and Wages in India, 292.
fluctuations of, 254, 255, 295.,

296, 300, 305
harvest and bazaar, 218, 219,
220, 222 et seq., Appendix
to Chapter IX.
high and low, 305
in the eighteenth century,.

292, 293, 294
rise in, 305, 311, 316
Privileged tenants, 77
Purneah, depopulation of, in 1770,
249

Quadrennial settlement, 32
Quinquennial settlement, 32

Rack-renting, 55, 57, 5S, 59
Raiffeisen, 99, 118, 119, 126

bank, educative influence of
a, 121, 127
model articles of a, 122
banks, 120, 121, 122, 124, 170
results achieved by, 124.
125

326

INDEX

Railways, 172, 173, 216,

Railway strike, interruption of

industry caused by a, 239
Ranade, Mr. Justice, 106, 107, 284,

285
Reaping, wages for, 192
Record of rights, 29
Regulation VII. of 1S22, 29, 67

IX. of 1833, 29, 30, 37, 67
Relief, gratuitous, 273, 274

works, numbers on, 275, 276,
277, 278, 279, 280
Rent, a proportion of the crop,

42,43
determined by custom, 40, 41
Mill's argument for a tax on,

25
paid in cash only when specie

had become commonly cur-
rent, 53, 54

paid in kind. See Batai
Rents, competition, 67, 70

in kind, system of levying,

57
in monev, devices for raising,

57, 58 "
origin of cash, 54
Reservoirs, 159, 16 1, 165
Revenue reporter, quoted for

prices, 318
Road, Grand Trunk, 172
Roads, 172, 173
Rotation of crops, 211

Sandila, harvest and bazaar

prices at, 225
Sands, W. J., 26, 27
Schulze Delitzsch, 99, 118, 120,

126
' Seir Mutaqherin,' 243, 247
Servants, the village, 190, 193, 197
Silver a more stable measure of

value than gold, 29S, 302, 316
Singarbar, a small thorny berry

used as food in the famine of

1837, 262
Smith, Adam, 174, 175, 189

W. H., Settlement Officer of
the Aligarh district, 1874,

35. 37, 49
Standard wage, 279, 280
Statistical Society, Journal of the

Royal, 307
Statistics, Director-General of,

291, 298
Steam - power, hand-power not

necessarily superseded by, 184,

185

Stirling, E., 31S

Storage of grain as a remedy for

famine, 254, 255
Stores of grain in the hands of

the Zemindars during famine,

259
Sub-proprietors, rights of, 27
Subsidiary industries in an Indian

village, 177
Sugar-mill, the iron-roller, 212
Swadeshi movement, 285

Takavi, 156, 157, 158

Talookdar, 26

Tanks, 153, 159

Tax-gatherer resisted by force of

arms. 41
Tenancy Act, North - Western

Provinces, of 1901, 77, 78, 79
Tenant-at-will, 67, 69, 70
Tenant, ex-proprietary, 77

semi-proprietary right of the,

18
sub-proprietary7 rights of the,

28, 29
supported his landlord in war
as well as in cultivation,

40,41
Tenants-at-will, 71, 73

number of, 58
Tenants, duty of the Government

to protect the rights of the,

65
privileged, 57, 58
rights of the, co-ordinate with
those of the landlord, 65, 66
Thornton the historian, 243
Trade unions, 287, 28S, 289
Transport, absence of means of,

253. 254

deficiency of natural means
of, in Northern India, 172

improvement in the means of,
268, 269, 270, 27 [

low prices owing to the ab-
sence of means of, 172
Triennial settlement, the first, 32,

34
the second, 32, 34

Unemployed, the relief of the,

272, 274
Unemployment in England, 287,
288, 289
in India and England com-
pared, 2S6, 287
United Provinces of Agra and
Ondh, 8, 9

INDEX

327

Usurer, 82, 83, 84
Usury, German and Austrian
laws against, 100

in France, 97, 98

in Germany, 99

in India, 102, 103'

in Italy, too, 10 1

Village, a self-sufficing industrial
unit, 175

Wages of the field labourer, 191
the labourer in India does not

usually work for, 189
the rate of agricultural, 191

Washerman, 177, 17S, 179

Wazan kashi, 45

Weaver, the condition of the

village, 206
Weaving, hand, 185, 186
Wells, area irrigated by, 150

constracted during the famine

of 1896-97, 283, 284
encouragement to build, 155
increase in the number of,

152
kachcha or temporary, 151
/>a^^«? or permanent, 151, 152
White, P. J., 216, 217
White way, R. S., 217, 31S

Zamindars, number of, 12

meaning of the term, 13
Zemindar, or better-class yeoman,
manner of life of, 230, 231

THE END

BILLING AND SONS, LTD., PRINTERS, GUILDFORD

UNIVERSITY OF TORONTO
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Acme Library Card Pocket

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M72

Morison, (Sir) Theodore, 1863-1936

The industrial organization of an Indian

Province. London, J. Murray, 1906.
vii, 327 p. illus.

Bibliography: p. 318-319.

1. United Provinces of Agra and Oudh - Eco-
nomic conditions 2. India - Economic con-
ditions 3. Ag- riculture - India
4. Gt. Brit. I - Colonies - India

I. Title V

— • — --.- — — >*.■.».*.» :„g

Ec.H
M86151

Morison, Theodore

P.

The industrial organisation of an Indian

rovince .

95080

I